Incident: Massive Dogevault Hack: Millions of Dogecoin Stolen, Service Compromised

Published Date: 2014-05-12

Postmortem Analysis
Timeline 1. The software failure incident of the Dogevault online wallet service happened in May 2014 [26818].
System 1. Dogevault online wallet system [26818]
Responsible Organization 1. Attackers compromised Dogevault's online wallet service, resulting in a service disruption and tampering with wallet funds [26818].
Impacted Organization 1. Dogevault users [26818] 2. Dogevault company [26818]
Software Causes 1. The software cause of the failure incident was a hack that compromised the Dogevault online wallet service, resulting in a service disruption and tampering with wallet funds [26818].
Non-software Causes 1. Lack of adequate security measures in place at Dogevault, leading to vulnerability to hacking attempts [26818]. 2. Previous incidents of cryptocurrency-related companies being hacked, indicating a broader trend of security vulnerabilities in the industry [26818].
Impacts 1. Loss of virtual currency: Several Dogevault users reported withdrawals from their accounts, with one user mentioning a massive 950,000 Dogecoin being taken from his wallet [26818]. 2. Service disruption: The Dogevault online wallet service was compromised by attackers, resulting in a service disruption and tampering with wallet funds [26818]. 3. Data loss: Attackers accessed and destroyed all data on the hosted virtual machines of Dogevault, leading to a loss of data [26818].
Preventions 1. Implementing robust security measures such as multi-factor authentication, encryption, and regular security audits could have prevented the hack on Dogevault [26818]. 2. Conducting thorough vulnerability assessments and penetration testing to identify and address any weaknesses in the system could have helped prevent the attack on Dogevault [26818]. 3. Enhancing employee training on cybersecurity best practices to prevent social engineering attacks or insider threats that could lead to security breaches [26818].
Fixes 1. Enhancing cybersecurity measures to prevent future hacking incidents, such as implementing stronger encryption protocols and multi-factor authentication [26818]. 2. Conducting a thorough security audit of the system to identify vulnerabilities and patch them to prevent similar attacks in the future [26818]. 3. Implementing regular security training for employees to raise awareness about potential threats like phishing attacks and social engineering tactics [26818]. 4. Communicating transparently with users about the incident, its impact, and the steps being taken to mitigate the damage and prevent future occurrences [26818].
References 1. Dogevault website 2. The Cryptocurrency Times 3. Dogecoin users 4. Dogecoin wallet owners 5. Dogecoin community 6. Dogevault company statement 7. Hackers involved in the incident 8. Online wallet containing the missing Dogecoin 9. Mt. Gox (Tokyo-based Bitcoin exchange) 10. Bitcoin bank Flexcoin 11. Dogewallet (another Dogecoin wallet) 12. News site reporting on the incident [26818]

Software Taxonomy of Faults

Category Option Rationale
Recurring one_organization, multiple_organization (a) The software failure incident having happened again at one_organization: - Dogevault, the online wallet service for Dogecoin, experienced a hack where attackers compromised the service, resulting in a service disruption and tampering with wallet funds. This incident is similar to a previous hack that occurred with another Dogecoin wallet, Dogewallet, in December where virtual currency was stolen [26818]. (b) The software failure incident having happened again at multiple_organization: - The article mentions that Dogevault is not the only cryptocurrency-related company to experience a robbery-based hack. It highlights the case of the Tokyo-based Bitcoin exchange Mt. Gox, which filed for bankruptcy after hackers stole nearly $500 million in bitcoins. Additionally, Bitcoin bank Flexcoin had to shut down after being hacked. This indicates that similar incidents have occurred at multiple cryptocurrency-related organizations [26818].
Phase (Design/Operation) design, operation (a) The software failure incident related to the design phase can be seen in the Dogevault case where the online wallet service was compromised by attackers, resulting in a service disruption and tampering with wallet funds. The attackers had already accessed and destroyed all data on the hosted virtual machines, indicating a breach in the design or security measures of the system [26818]. (b) The software failure incident related to the operation phase is evident in the Dogevault situation where users reported Dogecoin withdrawals from their accounts right before the website went offline. This indicates a failure in the operation or functioning of the system, possibly due to vulnerabilities that allowed unauthorized access and fund transfers [26818].
Boundary (Internal/External) within_system (a) within_system: The software failure incident related to the Dogevault online wallet service being compromised by attackers, resulting in a service disruption and tampering with wallet funds, was due to contributing factors that originated from within the system itself. Dogevault announced that attackers had accessed and destroyed all data on the hosted virtual machines, indicating an internal breach [26818].
Nature (Human/Non-human) non-human_actions, human_actions (a) The software failure incident in this case was primarily due to non-human actions, specifically a cyberattack on the Dogevault online wallet service. The article mentions that Dogevault's online wallet service was compromised by attackers, resulting in a service disruption and tampering with wallet funds. The attackers accessed and destroyed all data on the hosted virtual machines, leading to the theft of a significant amount of Dogecoin [26818]. (b) However, human actions also played a role in this software failure incident. The article highlights that Dogevault users reported Dogecoin withdrawals from their accounts right before the website went offline, indicating that the attackers exploited vulnerabilities in the system to steal the digital currency. Additionally, the company's response to the incident, including the announcement of the compromise and the investigation, involved human actions in trying to address the aftermath of the cyberattack [26818].
Dimension (Hardware/Software) hardware, software (a) The software failure incident related to hardware: - The article mentions that Dogevault's online wallet service was compromised by attackers, resulting in a service disruption and tampering with wallet funds. The attackers had accessed and destroyed all data on the hosted virtual machines, indicating a breach that originated in the hardware infrastructure [26818]. (b) The software failure incident related to software: - The same article highlights that Dogevault's online wallet service was compromised by attackers, resulting in a service disruption and tampering with wallet funds. This indicates a failure originating in the software system itself, allowing unauthorized access and manipulation of data [26818].
Objective (Malicious/Non-malicious) malicious (a) The software failure incident related to the Dogevault online wallet service was malicious in nature. The incident involved a massive hack where attackers compromised the service, resulting in a service disruption and tampering with wallet funds. The attackers accessed and destroyed all data on the hosted virtual machines, indicating a deliberate attempt to harm the system and steal digital currency [26818]. (b) Additionally, the incident is part of a larger trend in the cryptocurrency industry where various companies have experienced similar robbery-based hacks, such as the Mt. Gox Bitcoin exchange and the Dogewallet hack, highlighting the vulnerability of digital currency platforms to malicious attacks [26818].
Intent (Poor/Accidental Decisions) poor_decisions (a) The software failure incident related to the Dogevault hack appears to be more aligned with poor_decisions. The incident was a result of the online wallet service being compromised by attackers, leading to a service disruption and tampering with wallet funds. The attackers were able to access and destroy all data on the hosted virtual machines, indicating a significant security breach that could have been prevented with better security measures and decisions [26818].
Capability (Incompetence/Accidental) development_incompetence, unknown (a) The software failure incident related to development incompetence is evident in the Dogevault case. The incident was a result of the online wallet service being compromised by attackers, leading to a service disruption and tampering with wallet funds. The attackers had already accessed and destroyed all data on the hosted virtual machines, indicating a significant breach that could have been prevented with better security measures [26818]. (b) The software failure incident related to accidental factors is not explicitly mentioned in the provided article.
Duration permanent (a) The software failure incident related to the Dogevault online wallet service was permanent. The incident was caused by attackers compromising the service, resulting in a service disruption and tampering with wallet funds. The attackers had already accessed and destroyed all data on the hosted virtual machines, leading to a complete shutdown of the service [26818].
Behaviour crash, omission, other (a) crash: The software failure incident in this case can be categorized as a crash. Dogevault's online wallet service was compromised by attackers, resulting in a service disruption and tampering with wallet funds. The service was immediately halted, but the attackers had already accessed and destroyed all data on the hosted virtual machines, leading to a complete loss of functionality [26818]. (b) omission: The incident also involved omission as the Dogevault online wallet failed to perform its intended functions at the instance of the attack. Users reported Dogecoin withdrawals from their accounts right before the website went offline, indicating that the system omitted to carry out the necessary transactions securely [26818]. (c) timing: There is no specific mention of a timing-related failure in this incident. (d) value: The software failure incident did not involve the system performing its intended functions incorrectly. (e) byzantine: The incident does not exhibit characteristics of a byzantine failure where the system behaves erroneously with inconsistent responses and interactions. (f) other: The other behavior observed in this incident is a security breach leading to a theft of digital currency. Attackers compromised the system, resulting in the loss of funds and destruction of data, which is a significant aspect of this software failure incident [26818].

IoT System Layer

Layer Option Rationale
Perception None None
Communication None None
Application None None

Other Details

Category Option Rationale
Consequence property (d) property: People's material goods, money, or data was impacted due to the software failure The software failure incident involving Dogevault, a Dogecoin online wallet, resulted in a significant loss of digital currency for its users. Users reported Dogecoin withdrawals from their accounts just before the website went offline, with one user mentioning a massive 950,000 Dogecoin being taken from their wallet. Additionally, some of the missing digital currency reappeared in another online wallet that contained millions of Dogecoin. This incident points to a possible widespread hack of Dogevault, potentially leading to one of the biggest Dogecoin thefts in history [26818].
Domain finance (a) The failed system in this incident was related to the finance industry. The incident involved a massive Dogecoin heist from the popular online wallet Dogevault, where Dogecoin owners store their virtual currency [26818]. The article mentions that Dogevault's online wallet service was compromised by attackers, resulting in a service disruption and tampering with wallet funds [26818]. Additionally, the article highlights other cryptocurrency-related companies that have experienced robbery-based hacks, such as the Tokyo-based Bitcoin exchange Mt. Gox and Bitcoin bank Flexcoin [26818].

Sources

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