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Hardware Wallet For Bitcoin Storage Breached

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Popular hardware wallet KeepKey  which is designed to store bitcoins and other forms of virtual currency has informed to its users that company’s systems got breached by a hacker on the Christmas Day.

The founder of KeepKey, Darin Stanchfield said that the attacker activated a new phone number using his PIN-protected Verizon account and used that to hijack his email via its account recovery mechanism. The attacker then changed the passwords to all the accounts including Twitter account by resetting the passwords of accounts.

Stanchfield told that they managed to shut down the affected email services just in half an hour and began reversing the account resets from a secure email server.

In the meantime, the cybercriminal contacted the company and demanded 30 bitcoin. In return, he promised to stop the attack, destroy the data he had stolen, and inform KeepKey of the methods he used in the attack. The company decided not to give in to the extortion attempt and instead notified the FBI and provided the law enforcement agency with information on the attacker.

According to Stanchfield, KeepKey computers, servers and network were never compromised and the company does not store information on customer balances. Funds stored on the hardware wallets were never at risk.

The attacker gained access over the sales distribution channel, services of a vendor used for shipping and logistics, and an email marketing account. Attacker may have stolen physical emails and phone numbers, addresses, and Stanchfield said.

KeepKey has collected the IP addresses, browser information, email headers and phone numbers used by the attacker, but the firm believes much of it is likely fake. Nevertheless, the firm is offering 30 bitcoin ($30,000) to anyone who can provide information leading to the attacker’s arrest.


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