Incident: Cryptocurrency Wallet Hack: Root Access Bypasses "Unhackable" Security Measures.

Published Date: 2018-08-03

Postmortem Analysis
Timeline 1. The software failure incident of successfully hacking the "unhackable" cryptocurrency wallet happened in August 2018 as per Article [74666].
System 1. Bitfi crypto-wallet system [74666]
Responsible Organization 1. @OverSoftNL [74666]
Impacted Organization 1. Bitfi wallet maker [74666]
Software Causes 1. Lack of proper security checks in place to prevent unauthorized access to the cryptocurrency wallet, as claimed by Bitfi [74666].
Non-software Causes 1. The cryptocurrency wallet was claimed to be "unhackable" by both John McAfee and Bitfi, leading to a false sense of security [74666].
Impacts 1. The software failure incident led to the exposure of security weaknesses in the supposedly "unhackable" cryptocurrency wallet, causing doubts about its security claims [74666]. 2. The incident resulted in the compromise of the Bitfi wallet's security, as a hacker was able to gain root access and tweak its backend, indicating a significant flaw in the system [74666]. 3. The failure incident led to a loss of credibility for Bitfi and John McAfee, who had endorsed the wallet's security as "absolute" and offered bounties for hacking challenges [74666]. 4. The incident prompted Bitfi to offer a second bounty of $10,000 to address potential security weaknesses in the device, indicating a need for urgent security improvements [74666].
Preventions 1. Implementing proper security checks and measures to prevent unauthorized access to the cryptocurrency wallet could have prevented the software failure incident [74666].
Fixes 1. Implementing robust security checks and measures to prevent unauthorized access to the cryptocurrency wallet, such as enhancing encryption protocols and access controls [74666].
References 1. @OverSoftNL's Twitter account [74666] 2. John McAfee 3. Bitfi 4. TheNextWeb [74666]

Software Taxonomy of Faults

Category Option Rationale
Recurring one_organization, multiple_organization (a) The software failure incident related to the hack of the "unhackable" cryptocurrency wallet by @OverSoftNL can be considered as happening again within the same organization or with its products and services. This incident involved the Bitfi wallet, which was claimed to have "absolute" security by antivirus software pioneer John McAfee and Bitfi. However, @OverSoftNL was able to gain root access to the wallet, indicating a security vulnerability in the product [74666]. (b) The incident also highlights potential security weaknesses in the Bitfi device, prompting the CEO of Bitfi to announce a second bounty of $10,000 to assist in identifying and addressing these vulnerabilities. This suggests that similar incidents or concerns about security may exist with products and services offered by other organizations in the cryptocurrency and cybersecurity space [74666].
Phase (Design/Operation) design, operation (a) The software failure incident related to the design phase can be seen in the article where a cryptocurrency wallet, claimed to be "unhackable" by Bitfi, was successfully hacked by @OverSoftNL. The incident occurred due to the lack of proper security measures in place despite claims of absolute security. @OverSoftNL gained root access to the wallet, indicating a failure in the design phase where vulnerabilities were present in the system development or procedures to operate the wallet [74666]. (b) The software failure incident related to the operation phase is evident in the same article where the hacked cryptocurrency wallet was still able to connect to the dashboard even after being compromised. This indicates a failure in the operation phase where the misuse or improper operation of the system allowed the compromised wallet to function normally despite the security breach [74666].
Boundary (Internal/External) within_system (a) within_system: The software failure incident in this case can be attributed to factors originating from within the system. The hacker was able to gain root access to the supposedly "unhackable" cryptocurrency wallet, indicating a vulnerability within the system itself. The hacker mentioned that there were no checks in place to prevent gaining root access as claimed by the wallet maker, Bitfi. This highlights a flaw or oversight within the system's security measures [74666].
Nature (Human/Non-human) non-human_actions, human_actions (a) The software failure incident in this case seems to be related to non-human actions. The incident involved a claim of successfully hacking an "unhackable" cryptocurrency wallet by gaining root access to the wallet's backend, which allowed for tweaking its backend without any checks in place to prevent it [74666]. (b) On the other hand, human actions also played a role in this incident. For example, antivirus software pioneer John McAfee and hardware crypto-wallet maker Bitfi offered a bounty for anyone who could hack the wallet, and the CEO of Bitfi announced a second bounty to assist in identifying potential security weaknesses in the device [74666].
Dimension (Hardware/Software) hardware, software (a) The software failure incident related to hardware: - The incident involved a cryptocurrency wallet called Bitfi, which was claimed to have "absolute" security (Article 74666). - The hacker, @OverSoftNL, gained root access to the Bitfi wallet, indicating a vulnerability in the hardware of the wallet (Article 74666). - The CEO of Bitfi, Daniel Khesin, announced a $10,000 bounty to help identify potential security weaknesses in the Bitfi device, suggesting concerns about hardware security (Article 74666). (b) The software failure incident related to software: - The incident involved a software vulnerability in the Bitfi wallet that allowed the hacker to gain root access and tweak the backend of the wallet (Article 74666). - McAfee argued that having root access without the ability to modify or write data was not a significant security breach, indicating a software-related debate on the definition of hacking (Article 74666).
Objective (Malicious/Non-malicious) malicious (a) The software failure incident in this case appears to be malicious. The incident involved someone successfully hacking into a supposedly "unhackable" cryptocurrency wallet, gaining root access and tweaking the backend of the wallet [74666]. The individual who hacked the wallet claimed that there were no checks in place to prevent such access, indicating a security vulnerability that was exploited with the intent to breach the system's security. Additionally, the incident led to a dispute between the hacker and the company behind the wallet, with accusations of the initial bounty being a "sham" and the company offering a second bounty to address potential security weaknesses [74666].
Intent (Poor/Accidental Decisions) poor_decisions (a) The intent of the software failure incident related to poor_decisions: - The incident involving the hack of the supposedly "unhackable" cryptocurrency wallet by @OverSoftNL can be attributed to poor decisions made by Bitfi and John McAfee. They claimed the wallet had "absolute" security, offered a bounty for anyone to hack it, and later raised the bounty amount. However, @OverSoftNL was able to gain root access to the wallet, exposing its lack of security measures [74666]. (b) The intent of the software failure incident related to accidental_decisions: - The incident does not seem to be related to accidental decisions. It was more about the claims made by Bitfi and McAfee regarding the security of the wallet and the subsequent hack by @OverSoftNL, which highlighted the lack of actual security measures in place [74666].
Capability (Incompetence/Accidental) development_incompetence, unknown (a) The software failure incident related to development incompetence can be seen in the article where a self-described IT geek in the Netherlands successfully hacked an "unhackable" cryptocurrency wallet, which was claimed to have "absolute" security by antivirus software pioneer John McAfee and hardware crypto-wallet maker Bitfi. The hacker gained root access to the crypto-wallet, exposing the lack of proper security measures in place despite the claims made by Bitfi [74666]. (b) The software failure incident related to accidental factors is not explicitly mentioned in the provided article.
Duration temporary (a) The software failure incident in this case appears to be temporary. The incident involved a claim of successfully hacking an "unhackable" cryptocurrency wallet by gaining root access to it. The hacker was able to tweak the wallet's backend and confirmed that the wallet still connected to the dashboard without any checks in place to prevent it. The incident led to a dispute between the hacker and the wallet maker regarding the security of the wallet. Additionally, the wallet maker Bitfi offered bounties to address potential security weaknesses in the device, indicating a temporary failure that required specific circumstances to exploit ([74666]).
Behaviour value, other (a) crash: The incident described in the article does not involve a crash where the system loses state and does not perform any of its intended functions. (b) omission: The software failure incident does not involve the system omitting to perform its intended functions at an instance(s). (c) timing: The software failure incident does not involve the system performing its intended functions correctly, but too late or too early. (d) value: The software failure incident involves the system performing its intended functions incorrectly. The hacker claimed to have gained root access to a supposedly "unhackable" cryptocurrency wallet, indicating a failure in the security measures of the wallet [74666]. (e) byzantine: The software failure incident does not involve the system behaving erroneously with inconsistent responses and interactions. (f) other: The behavior of the software failure incident can be categorized as a security vulnerability or breach. Despite claims of being "unhackable," the cryptocurrency wallet was compromised, highlighting a flaw in the system's security measures [74666].

IoT System Layer

Layer Option Rationale
Perception processing_unit, embedded_software (a) sensor: The software failure incident reported in the article is not related to a sensor error. (b) actuator: The software failure incident reported in the article is not related to an actuator error. (c) processing_unit: The software failure incident in the article is related to a processing error as the hacker gained root access to the crypto-wallet, allowing for tweaking its backend [74666]. (d) network_communication: The software failure incident in the article is not directly related to a network communication error. (e) embedded_software: The software failure incident in the article is related to an embedded software error as the hacker gained root access to the crypto-wallet, indicating a security flaw in the wallet's embedded software [74666].
Communication unknown The software failure incident reported in Article 74666 does not directly relate to a failure at the communication layer of the cyber-physical system. Instead, the incident involves a claim of successfully hacking an allegedly "unhackable" cryptocurrency wallet, highlighting security vulnerabilities in the software and the device itself. The failure is more focused on the security and integrity of the wallet's software rather than issues at the communication layer of the cyber-physical system.
Application TRUE The software failure incident described in Article 74666 was related to the application layer of the cyber physical system. The incident involved a claim of successfully hacking an "unhackable" cryptocurrency wallet by gaining root access to the wallet, which was supposed to have "absolute" security. The hacker was able to access the wallet's root folder directory, tweak its backend, and connect it to the dashboard without the claimed security checks in place by Bitfi. This incident aligns with the definition of a failure at the application layer, involving bugs, security vulnerabilities, and incorrect usage [74666].

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 in the article involves a claim of successfully hacking an "unhackable" cryptocurrency wallet. The hacker gained root access to the crypto-wallet, which was supposed to have "absolute" security according to antivirus software pioneer John McAfee and hardware crypto-wallet maker Bitfi. This breach of security and gaining root access to the wallet could potentially impact the users' cryptocurrency stored in the wallet, which is a form of digital property [74666].
Domain finance (a) The failed system in this incident was related to the cryptocurrency industry, specifically a crypto-wallet designed to securely store cryptocurrencies like Bitcoin [74666].

Sources

Back to List