Questions surface as Yahoo confirms breach of 500M+

In July, the company received a report saying a hacker had stolen 280 million users’ details, but an investigation unearthed what is now the biggest hack in history.

Yahoo is scrambling after it revealed that its users have fallen victim to the biggest security breach in history.

On Thursday, the company said it believes that information for “at least” 500 million user accounts was stolen.

The Guardian reported:

Details, including names, email addresses, phone numbers and security questions were taken from the company’s network in late 2014. Passwords were also taken, but in a “hashed” form, which prevents them from being immediately re-used, and the company believes that financial information held with it remains safe.

Bloomberg further explained:

In July, Yahoo! Inc. received a report of a hacker claiming to have 280 million user account credentials for sale on the black market. An initial investigation found no evidence to back that up, according to a person familiar with the probe.

Claims like these are common nowadays. However, Yahoo decided to conduct a deeper, separate investigation and, piece by piece, the company slowly accumulated evidence of an even larger breach. Earlier this week, the person said there was enough evidence to tell Verizon Communications Inc., which had agreed to buy Yahoo’s web assets for $4.83 billion on July 25. The person asked for anonymity to discuss internal findings.

Business Insider reported that until now, the biggest hack was with MySpace, where 427 million users’ accounts were compromised.

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Yahoo issued a press release to investors that read, in part:

A recent investigation by Yahoo! Inc.(NASDAQ:YHOO) has confirmed that a copy of certain user account information was stolen from the company’s network in late 2014 by what it believes is a state-sponsored actor. The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. The ongoing investigation suggests that stolen information did not include unprotected passwords, payment card data, or bank account information; payment card data and bank account information are not stored in the system that the investigation has found to be affected. Based on the ongoing investigation, Yahoo believes that information associated with at least 500 million user accounts was stolen and the investigation has found no evidence that the state-sponsored actor is currently in Yahoo’s network. Yahoo is working closely with law enforcement on this matter.

Bob Lord, Yahoo’s chief information security officer, also published a Tumblr post with instructions:

We are taking action to protect our users:

  • We are notifying potentially affected users. The content of the email Yahoo is sending to those users will be available at t beginning at 11:30 am (PDT).
  • We are asking potentially affected users to promptly change their passwords and adopt alternate means of account verification.
  • We invalidated unencrypted security questions and answers so they cannot be used to access an account.
  • We are recommending that all users who haven’t changed their passwords since 2014 do so.
  • We continue to enhance our systems that detect and prevent unauthorized access to user accounts.
  • We are working closely with law enforcement on this matter.

We encourage our users to follow these security recommendations:

  • Change your password and security questions and answers for any other accounts on which you used the same or similar information used for your Yahoo account.
  • Review your accounts for suspicious activity.
  • Be cautious of any unsolicited communications that ask for your personal information or refer you to a web page asking for personal information.
  • Avoid clicking on links or downloading attachments from suspicious emails.

Though Yahoo has laid out a plan for handling its crisis, critics say that blaming the breach on a state-backed hack shows a lack of responsibility.

Bloomberg Gadfly technology columnist Tim Culpan wrote:

… In blaming a “state-sponsored actor,” Yahoo seems to be trying to tell us “there’s nothing we could do.” JPMorgan tried a similar tactic, with little success, after a 2014 hack.

It’s as if foreign governments are expected to be able to breach any firm’s cyber-security measures, and corporations should be forgiven.

Culpan criticized this approach:

Cyber security is one of the few areas where victim-blaming might be considered acceptable, and by victim, I mean the companies. In reality, the real victims are the customers, because little downside ever seems to visit the corporations, or their executives.

However, Culpan also said for large—and potentially catastrophic—data breaches, alleging it was a state-backed hack instead of a non-government intrusion could stem backlash.

“Blaming it on a state-sponsored actor looks suspiciously like PR spin, but the alternative could be worse,” he wrote.

Yahoo is being criticized for more than pointing fingers, however. One of the largest concerns surfacing is why the company waited until now—two years after learning of the attack—to announce it to users and investors.

The North America technology reporter for BBC, Dave Lee, wrote that although the stolen information seems “run-of-the-mill,” the events that preceded Yahoo’s recent announcement brings up several questions:

Why did it take so long to confirm the hack and its scale? Why did it take so long to tell users and prompt them to protect themselves?

State-sponsored attacks are typically for political, not financial gain. So why were details reportedly being sold online? What evidence is there that it was state-sponsored?

Verizon, which has agreed to buy Yahoo, said it had not been told until a couple of days ago – why not? And why is Marissa Mayer, a chief executive who has presided over bad deals and now the biggest breach in internet history, still in charge?

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