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Bitcoin Privacy Security

Researchers Cracked an 11-Year-Old Password To a $3 Million Software-Based Crypto Wallet (wired.com) 74

Posted by BeauHD from the if-there's-a-will-there's-a-way dept.
An anonymous reader quotes a report from Wired: Two years ago when "Michael," an owner of cryptocurrency, contacted Joe Grand to help recover access to about $2 million worth of bitcoin he stored in encrypted format on his computer, Grand turned him down. Michael, who is based in Europe and asked to remain anonymous, stored the cryptocurrency in a password-protected digital wallet. He generated a password using the RoboForm password manager and stored that password in a file encrypted with a tool called TrueCrypt. At some point, that file got corrupted and Michael lost access to the 20-character password he had generated to secure his 43.6 BTC (worth a total of about [...] $5,300, in 2013). Michael used the RoboForm password manager to generate the password but did not store it in his manager. He worried that someone would hack his computer and obtain the password. "At [that] time, I was really paranoid with my security," he laughs.

Grand is a famed hardware hacker who in 2022 helped another crypto wallet owner recover access to $2 million in cryptocurrencyhe thought he'd lost forever after forgetting the PIN to his Trezor wallet. Since then, dozens of people have contacted Grand to help them recover their treasure. But Grand, known by the hacker handle "Kingpin," turns down most of them, for various reasons. Grand is an electrical engineer who began hacking computing hardware at age 10 and in 2008 cohosted the Discovery Channel's Prototype This show. He now consults with companies that build complex digital systems to help them understand how hardware hackers like him might subvert their systems. He cracked the Trezor wallet in 2022 using complex hardware techniques that forced the USB-style wallet to reveal its password. But Michael stored his cryptocurrency in a software-based wallet, which meant none of Grand's hardware skills were relevant this time. [...] Michael contacted multiple people who specialize in cracking cryptography; they all told him "there's no chance" of retrieving his money. But last June he approached Grand again, hoping to convince him to help, and this time Grand agreed to give it a try, working with a friend named Bruno in Germany who also hacks digital wallets.

Grand and Bruno spent months reverse engineering the version of the RoboForm program that they thought Michael had used in 2013 and found that the pseudo-random number generator used to generate passwords in that version -- and subsequent versions until 2015 -- did indeed have a significant flaw that made the random number generator not so random. The RoboForm program unwisely tied the random passwords it generated to the date and time on the user's computer -- it determined the computer's date and time, and then generated passwords that were predictable. If you knew the date and time and other parameters, you could compute any password that would have been generated on a certain date and time in the past. [...] There was one problem: Michael couldn't remember when he created the password. According to the log on his software wallet, Michael moved bitcoin into his wallet for the first time on April 14, 2013. But he couldn't remember if he generated the password the same day or some time before or after this. So, looking at the parameters of other passwords he generated using RoboForm, Grand and Bruno configured RoboForm to generate 20-character passwords with upper- and lower-case letters, numbers, and eight special characters from March 1 to April 20, 2013. It failed to generate the right password. [...] Instead, they revealed that they had finally found the correct password -- no special characters. It was generated on May 15, 2013, at 4:10:40 pm GMT.
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Researchers Cracked an 11-Year-Old Password To a $3 Million Software-Based Crypto Wallet More

Researchers Cracked an 11-Year-Old Password To a $3 Million Software-Based Crypto Wallet

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  • > The RoboForm program unwisely tied the random passwords it generated to the date and time on the user's computer -- it determined the computer's date and time, and then generated passwords that were predictable.

    In other words, the tried-and-true srand(time(NULL)).

  • The grand master plan of crypto (Score:1, Insightful)

    by Anonymous Coward

    The plan for all cryptocurrencies isn't what they want to make you think it is. It's more sinister than the egalitarian image the crypto boys portray for it.

    After the 2008 financial meltdown, cryptocurrencies were born out of it, declared to be the means by which people could be freed from banks/governments, and promised to avoid any such future meltdowns from happening ever again.

    But the crypto boys watched closely the result of that meltdown, and formulated their plan: create a new form of currency, and

    • Re:The grand master plan of crypto (Score:5, Interesting)

      by Pascoea ( 968200 ) on Tuesday May 28, 2024 @04:43PM (#64506325)
      I'm certainly no crypto-bro, I own a grand total of $100 worth of random crypto currencies. From my perspective it seems as though the prognosticators of "the end of crypto" have a pretty decent track record of being flat-out wrong so far.

      • Crypto is valueless (Score:2, Insightful)

        by Anonymous Coward

        Crypto is a great way to gamble that someone later than you will come along and buy it for more than you paid for it.

        If it had an actual "value" you would have to wait for that future sucker to go along. You could just sell it and make a profit, right?

        OR if it had a real value you'd hold onto it for ages. Why sell to the FIRST sucker willing to pay you more. Best to hold long and let ie appreciate.

        But like any magical bean it has no value, no magical properties, and your only wager is there's someone stu

        • Re:Crypto is valueless (Score:4, Insightful)

          by Xenx ( 2211586 ) on Tuesday May 28, 2024 @05:24PM (#64506415)
          This is only in reference to your post, and not meant as any kind of endorsement for crypto.

          Crypto is a great way to gamble that someone later than you will come along and buy it for more than you paid for it. If it had an actual "value" you would have to wait for that future sucker to go along. You could just sell it and make a profit, right?

          That is not a unique quality to crypto. It's more or less true of any investment purchase. People assign arbitrary value to all sorts of things. Art, books, property, beanie babies, stock(see GME for example), you name it. Yes, usually there is a physical element of ownership. However, in all cases they're ultimately only worth what someone is willing to pay for it. Crypto is functionally no different. Pick a better argument.

          • There's a ceitical difference between any of those things and crypto which you mention but downplay.

            When the beanie baby market crashes, I still have a beanie baby I can hold on to in the hope that decades later it will come back or give it to my dog to play with and tear apart. It has real world value. I may have paid too much for a dog toy but I still got a dog toy,
            Crypto has nothing. It's just random numbers in a computer.

            Anyway this is not a proper comparison. The proper comparison is vs the thing c

            • Re: (Score:2)

              by Xenx ( 2211586 )

              There's a ceitical difference between any of those things and crypto which you mention but downplay.

              I specifically mentioned the difference existing. I'm not downplaying it. If your goal is investment, having a physical good when the price falls means little. As to the rest of what you said, it's just not relevant to my point.

              • I still feel you're downplaying it.

                Beanie babies and other collectibles are not investments.
                Art and jewelry are not investments.
                Crypto is not an investment.

                Stocks, bonds, real estate, and commodities are investments.

                • Re: (Score:2)

                  by Xenx ( 2211586 )
                  I'm downplaying nothing. My original point still holds true. People spend money on those things, as an investment, and people feel that is fine because it's a physical good. It being a physical good has no impact on it as an investment. As such, the idea that crypto is somehow different from them is just incorrect. I agree they shouldn't be, but it was never relevant to my point. Don't use flawed logic to argue against something you don't like. Pick any of the legitimate issues.

                  • Re: (Score:2)

                    by Xenx ( 2211586 )

                    I agree they shouldn't be, but it was never relevant to my point.

                    I realize this wasn't written well. I'm saying crypto, or those other physical goods, shouldn't be used as an investment.

          • (My post was going to say the same as iAWSTY's except meaner)

            • Re: (Score:2)

              by Xenx ( 2211586 )
              Hey, you can both be wrong. It's fine. I don't give a fuck about crypto, only the lack of logic in the anon's logic.

              • Re: (Score:2)

                by Xenx ( 2211586 )
                god damn it... "anon's post."

              • Maybe you don't understand economics.

                I'm no expert but I took some classes in college and read a few books since.
                Not an expert but I know enough that commodities and stocks have a little more going on than some other guy's willingness to purchase them. I know just enough to say what's up, down, port and starboard. I'd normally say my ignorance is a reason to stay quiet but in this case, as it often is with meme stocks and crypto, the fact I know you're wrong speaks to how dumb you're acting.

                Like this shou

                • Re: (Score:2)

                  by Xenx ( 2211586 )
                  None of what you said actually contradicts anything about the point I actually made. The fact that you don't see that tells me enough.

      • Re: (Score:2)

        by taustin ( 171655 )

        From my perspective it seems as though the prognosticators of "the end of crypto" have a pretty decent track record of being flat-out wrong so far.

        Much like the crypto bros who have a 100% record of being wrong that crypto would destroy centralized banking because it's so much better?

        Cypto is a ponzi scheme, pure and simple. It's exactly the same as a company where the only product they sell is their stock.

      • Everybody gets the end of something wrong until that something actually ends. Things denominated in such large numbers often have a very long descent before the crash.

        https://www.visualcapitalist.c... [visualcapitalist.com]

        Venerable BitCoin, seemingly the healthiest - also has to be looked at as being the coin that others flee to. Being the honest broker of last resort doesn't protect it from eventual collapse - but it makes for a very long tail.

        Might take another decade. Maybe longer. And until they are right, the doom predictor

    • nice copypasta. i hope you're enjoying the massive inflation due to broken money that gets printed and distributed to cronies

      • Pyrite Pete's failed prediction (Score:1)

        by Anonymous Coward

        On Monday April 26, 2021 @02:16AM UTC, Pyrite Pete [urbandictionary.com] had said:

        That was back when bitcoin had already fallen, and down to about $47K at the time. It should've been back up to "twice its value" no later than June 26 2021 - over 2.5 years ago. It's still nowhere near the $94K Pyrite Pete promised us.

        Now that's what I call a prediction #FAIL!

        Want more LOLs @ Pyrite Pete shitposts? Here are but a sample:

        "It is pretty much a given that BTC will be up to 100, [slashdot.org]

        • you kinda deserve what you get for following financial advice from some anonymous random coward on the internet.

      • Re: (Score:1)

        by Anonymous Coward

        Nice pointless trolling, fucktard.

        Now run upstairs to your mommy and whine about how a mean baddie on the Internet wasn't nice to you...

        Cope and seethe.

        • why would i cry? it's the fiat bros that keep getting robbed by central banks. join them and make tiktok videos of yourself crying because you haven't opted out of broken money.

  • When they report numbers like this in the US they should have to remind everyone: the wallet may be worth $3M, but the government gets $1.5M

    • Comment removed based on user account deletion

      • Not so.

        Once you make a lot of money and don't have to work, you still get taxed on how that old money makes new money.

        For example, I have cash accounts making about 5% interest. That interest is taxed at income rates not capital gains.

        Any stock I sell before a year is also at income tax rates.

        There are many other investments that either have hold term requirements or simply are always income tax rate.

      • The percentages aren't comparable because capital gains are taxed at the end (when they are 'realized'), and do NOT account for inflation.

        To use a simple example, imagine your investment rises, but only at the rate of inflation, until it has risen 100% (doubled). You sell it and pay 20% capital gains tax. Congratulations, you're 10% poorer than when you started (because you paid 20% of the 50% which is counted as a 'gain').

      • You can transfer the money to a corporation and have the company loan you the money, perhaps using one's stock collection as collateral. One way that well-heeled people pay $0 in taxes is taking out loans on the value of a stock, because the stock market, as a whole, only goes up over time. Even now, when the economy is slow, the Dow is hitting record heights, so if one wants something that always increases, perhaps cash out of BTC and go for index funds. No moonshots, but as close to a guarantee of gain

    • When they report numbers like this in the US they should have to remind everyone: the wallet may be worth $3M, but the government gets $1.5M

      "Michael, who is based in Europe..."

      • When they report numbers like this in the US they should have to remind everyone: the wallet may be worth $3M, but the government gets $1.5M

        "Michael, who is based in Europe..."

        Taxes on Crypto vary quite a bit from country to country, in some EU countries it can be similar to US tax rates (10% to 20%) but in most it's higher and I've seen upwards of 40% reported in some places.

  • ... that the software wallet did not include any kind of "ten failed attempts and you are locked out forever" protocol like many USB keys do.

    That would allow a theoretical endless supply of wallet copies against which to try generated passwords. That, or one of the generated ones matched the Post-It note stuck on Michael's monitor.

  • Lesson learned (Score:3)

    by Local ID10T ( 790134 ) <ID10T.L.USER@gmail.com> on Tuesday May 28, 2024 @04:51PM (#64506339) Homepage

    Write your passwords down and store the paper somewhere safe... like a safety deposit box at the bank or with your attorney.

    If they aren't that important, write them down on a piece of paper and just put it in your desk drawer.

    If you have a fire-safe/box for important papers, put it in there. That covers 99% of situations you will encounter.

    • I wouldn't put anything important in a home safe.

      My home safe is moderately large and heavy and hidden just enough to make someone want to spend time and effort to haul it out instead of looking for things of value. When they get it open at their warehouse all they get is a fuck you note that says they were on camera the whole time.

      Scribble it on a piece of paper and tape it to the back of your mom's television or some other location apart from your computer that no one else will ever look nor know what it

    • Re: (Score:1)

      by AmiMoJo ( 196126 )

      The problem with the paper method is that it only works at your desk, and has no backups.

      A password manager is a much better solution. Then you only need one master password, which can be very strong and also include a second or even third factor. You can take the data with you for use on your mobile devices, and back it up easily and automatically.

      Use Keepass. The crypto is strong and open source.

      • It depends on what one wants to store:

        My GPG key, I use a couple Trezor Model T units, because with the recovery code, I can get my key back, which I use for git commits. I also use it for the tiny amount of cryptocurrency I have, as it provides solid protection. Plus, having the key on a hardware device ensures someone not just has to be physically present, but tapping the unlock code on the device itself, which will eat itself after a few wrong guesses.

        My passwords, definitely KeePass. Store a keyfile

    • Depends on what you want to secure it from. Stuff like wills and deeds, I put in a fire rated container like a Fire King 2 hour rated cabinet that has a Medeco lock on it. No, not 100% secure against LPL tier people, but good protection for papers.

      For recovering crypto, you can use a Trezor Model T (trust me... just go for that model) for not just Bitcoin, but GPG keys. The BIP-39 recovery codes from that go on two metal wallets, and those go in a secure place (for example, I have a remote storage that I

  • I've heard quantum computers could render older cryptocoin obsolete because having an upgrade path would require exposing the chain. True?

    • Re: (Score:2)

      by ceoyoyo ( 59147 )

      I'm not sure what "exposing the chain" means, but Bitcoin and Etherium use ECDSA signatures which are vulnerable to Shor's algorithm.

  • Analog is still better (Score:4, Insightful)

    by quonset ( 4839537 ) on Tuesday May 28, 2024 @05:09PM (#64506383)

    After his initial password was generated, all he had to do was write it down and store the paper somewhere secure, preferably with multiple copies. But nope, we insist in pursuing the irrational notion that digital is the be all and end all.

    Had he written his password down, none of this would have been necessary.

    • Re: (Score:2)

      by brunes69 ( 86786 )

      Unless the paper was lost.

      This is the inherent problem with DeFi.

      When the bank has your money, and you need to get it back out, there are legal methods at your disposal to prove who you are and do so, regardless of if you lost your password. And, there are thousands of years of legal precedent to back those methods up.

      When your money is in a private wallet, and you lose the key.. you are SOL.

      • This is the inherent problem with DeFi.
        ...

        When your money is in a private wallet, and you lose the key.. you are SOL.

        Multisig wallets can help mitigate this. With 2-of-3 multisig, you and your partner can have one key each, then have a financial provider hold the third key. Then if either you or your partner lose their key, the wallet would still be accessible after going through traditional verification with the financial provider.

        This would of course make spending from the wallet more difficult, since that would require two keys.

      • Unless the paper was lost.

        That's why I said multiple copies. One at home in the safe, one at a bank in a safe deposit box, one buried in your back yard in a sealed container, one with your attorney (if you have one).

      • You can use a split key.

        2/3 of the key is in the home safe.

        2/3 of the key in a safety deposit box at the bank.

        2/3 with a trusted relative.

        The original key can then be reconstructed with any two sources and your key is safe against theft (including "theft" by judicial order).

  • That's being just plain old stupid.

    • Not really. Software password storage on computers of the time were not good. An offline external device is safer, if you keep it safe. Just like with your computer, you don't want the computer to break or its non volatile memory to get corrupted.

      Given that Roboform had problems with its password generation, I presume that the rest of it was chock full of bugs and it was unsuitable to manage passwords as well.

      Of course, for offline password storage, make copies. Especially if they're important.

      • I learned this the hard way. Was using an app to sync Google Authenticator keys, and the app not just corrupted things, but synced the corrupted data. Were it not for an offline iPod Touch, I would have been in a world of hurt. Because of this, I use a PW manager that not just allows for syncing, but for plaintext backups so I can export all the data and move it to another PW manager if the need arises.

  • ... paranoid with my security ...

    Like most people, he didn't think that he would lose/damage his password: That's short-sighted and a lack of paranoia. The phrase 'penny-wise and pound-foolish' comes to mind. This is why Google and Apple nag phone-users to enable automatic back-ups: That's still not an answer. Sensitive data also needs a version history, which most encryption services don't provide (the KeePass database does). It's why back-ups must be performed manually.

  • All RoboForm users are changing their passwords...

  • All this forgetting of passwords has in fact lead to the owners not selling when they were getting 10% profit.

    So all those that haven't got their passwords recovered yet, should take comfort in that fact. Probably they will get them recovered when quantum computing is ready for it, and the value of their crypto coins will exceed the whole world GDP.

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