The Most Expensive Lesson of My Life: Details of SIM Port Hack
medium.com
medium.com
The reason I say it's odd is that he's an engineering manager at BitGo, which is a leading cryptocurrency custody solution! His job is literally to secure and protect institutional cryptocurrency wallets, and to publicly tell the world how careless he was with his own personal account looks extremely poorly on his employer despite the fact that this was an unrelated incident.
IMO its great to learn about what goes well but super valuable to learn when people face-plant.
With crypto the government can't get involved so you're screwed
My debit card is capped at $400? Cash a day. So cool you get $400 if you steal it. Very different from 100k
Spending 100 crypto coins? Not so much.
- credit cards with secrets printed and shared in plain sight
- hacked banks
- hacked atms
It only works because most involved are somewhat trustworthy and the damages are small enough that it’s still worth to have the system.
But the latter also seems to be true for crypto. It shifts the responsibility further to the user. Some like it because they assume they can provide better opsec than their bank (which was easy in the past). Others don’t like to take responsibility and leave it with some exchange, which in some cases even lack behind banks.
So while the infrastructure may be fundamentally insecure, quite frankly that's not my problem. If it was a crypto wallet I would have had zero legal recourse and of course never would have seen that money again - as we're seeing again and again.
I do hold some ETH but I don't see it replacing my bank anytime soon.
No idea how feasible this might be in other countries, but wanted to share in case its helpful. It's really helped me have ease of mind in using my card when I've been abroad.
Doesn't stop me from attempting to dismantle any ATM though whenever I use one :')
And while you were reimbursed, the damage to the whole community was still done and just covered by an insurance fee that everyone pays on every transaction.
This is a simplification. For all customer-present transactions cards use the secrets in a secure chip, and the transaction is authorised by the cryptographic processor in those chips signing the transaction data with a secret key. It's classic 2FA - Something you have (a card) and something you know (a PIN).
The type-in-a-number-on-a-website purchases are the weak link, and even they are usually protected by another layer of passwords (3D-secure, Verified by Visa etc).
It's quite a while (in most places outside the US) since the number on the front was the secret.
In a Chip + PIN transaction, the second factor is your digital PIN, whereas in the Chip + Signature transaction the second factor is your signature. It's still 2fac, but more importantly, in neither case is the secret on the front of the card.
do most people sign their name on those digital pads, or do they scribble random patterns?
a signature is not a pre-authentication factor, a PIN is.
Having a chip prevents (or at least is intended to prevent) card skimming. EMV payments cannot be re-played, cards cannot be duplicated and neither the card nor the reader can be tampered with. The magstripe of a chip card includes a flag indicating the card has a chip so even if you duplicated the stripe, it still wouldn't work. That is a material improvement over magstripe-only cards, and the private key is embedded within the silicon in a highly tamper-resistant way. This got the US the bulk of the 'win'.
With respect to cardholder verification, the Cardholder Verification Methods range, from least to most secure (from the perspective of a bank): None (i.e. have at it), Signature, PIN and CDCVM (ApplePay, etc). The CVM is negotiated between the card and the reader on insertion (EMV) or presentation (NFC/EMV). Each of these CVMs will impact to some extent things such as how likely a transaction is to be approved vs declined, how much you're charged in interchange to make up for it, and so on.
Yes, PINs are more secure in some ways because they provide a pre-payment second factor and in some ways yield a false sense of security. For instance, if someone sees you key in your PIN, you'll have a harder time claiming fraud, and in Europe it's on you to prove that. In the US, it's on the merchant. The trade-off here is again more time. Merchants are often willing to pay a slightly higher interchange rate to get people through the line faster, and signature is unequivocally faster than Online pin (requiring another network request to decrypt/verify) and still faster than Offline pin (which only works in Europe and is capped through floor limit).
Consider this from the perspective of all the layers of security even an EMV signature payment has. Tamper-proof physical card required that cannot be cloned, tamper-proof terminal, the card yields a signed payment request to your acquirer who can flag it as fraudulent, to the issuing bank who can flag it as fraudulent, and all the way back down to the card which can itself mark your transaction as fraudulent (it's called a reversal). Then you sign. And your photograph / video is likely recorded by the merchant at the point of sale, too. PIN or no-PIN, in a low fraud rate market, the win is small but the cost in added time can be really high.
If this mattered in the US and PIN were truly advantageous, restaurants could configure their terminals to request signatures or no verification while high-ticket size merchants could still capture PINs. They could still make this change at any time, really, all the tech out there more or less supports it. During the EMV transition all this was considered, and the decision was made it wasn't worth it.
tl;dr: Sometimes the 'less secure' method get you the bulk of the security win while yielding more profit for the merchant.
Source: I worked in payments for years including during the EMV switchover :) Hope that helps!
1) readers can be tampered with - https://www.creditcards.com/credit-card-news/new-card-skimmi...
and
2) there was some ability to clone the cards https://www.kaspersky.com/blog/chip-n-pin-cloning/21502/
We also have SEPA Inst which allows me to send people money instantly for no fees (atleast at my bank), faster than Bitcoin ever could.
I'm insured against the bank being hacked. I'm also insured against the ATM's being hacked.
If I'd open my bank account today and found 0€ via hacks, I'd get it all back in 99.9% of cases. If I loose my card I get back everything too.
If I loose my bitcoin wallet, I'm SOL and should be sorry for not making backups and using a multisig wallet with 2FA!
And that the chip cards were invented and used in Europe decades before they started to be spread in the UK and the U.S.
I don’t know why but somebody with more insider information can maybe explain?
It's not particularly insider information, the reason America was slow to the chip card game was pragmatic. The US is a very low fraud rate market, and re-issuing all 1.43 billion credit cards [1] and 14M payment terminals [2] was going to cost an awful lot of money. Further, major industry players like McDonalds weren't interested in seeing line speeds go down at point of sale as they switch from mag stripe payments which happen real fast to EMV chip transactions which, at the time, were really slow. Think <1s for magstripe to 10s of seconds for EMV. NFC helps mitigate this, but again, dual-interface cards (EMV + NFC + Mastripe) are a few dollars a piece.
tl:dr; it wasn't until a few years ago that the cost of the transition outweighed the cost of the fraud that would be mitigated as a result.
[1] https://wallethub.com/edu/cc/number-of-credit-cards/25532/
[2] https://gomedici.com/steady-growth-in-nfc-pos-terminals-in-t...
This is not true. All you need to do online transactions is the number, expiration and CCV, all of which is printed on EC cards.
Alternatively you need a SEPA merchant account, but running fraud on that gets you sued to hell and back.
EC cards do not have a CCV number.
I remember first hearing about them in 2016:
https://www.ftc.gov/news-events/blogs/techftc/2016/06/your-m...
BitGo should be treating this as a security incident and verifying the attacker didn’t also target them.
Edit: I should've clicked the link there, it says pretty much the same. It doesn't seem to me there was much left to explain - the attacker gained access to Bitfinex's keys and that was enough to withdraw. The idea of using BitGo was that a compromise of Bitfinex couldn't lead to loss of user funds, but Bitfinex holding two keys completely undermined that goal.
Want to port a SIM? I'll put your request in now but it will wait for 5 business days before it happens, and at any point if you or someone claiming to be you calls up to stop it, we stop it, no questions asked.
Want to change 2 factor information for an account? We can put in the request now and it won't take effect for a week while we reach out to you using every communication method we know how to let you know it's happening and give you ample time to stop it if you discover it wasn't actually you that did it.
It seems like a fairly "low cost" way of upping the security quite a bit.
Also, not to make the OP feel worse, but Coinbase even offers a service like this called the "vault". The idea being that withdraws are time-locked for a specific amount of time, and there are multiple ways to stop it during that time lock, even if you got locked out of your account entirely.
And while we are doing PSAs, I'd like to give one piece of seemingly conflicting advice: make sure you have backups of your multi-factor authentication systems.
Sure, having your accounts taken over is awful, and it can happen to anyone, but something just as bad is losing your 2-factor systems and being locked out of accounts with no way to recover them.
Print out 2-factor backup codes, put them somewhere safe, maybe split them in 2 and put half of the codes in one place, and half in another. Think through possible problems. It really sucks to have your house flood, then find out that your phone with the 2-factor app on it was destroyed, and your backup codes ruined as well...
This to me seems to be a complete misunderstanding of the telcos business and motivations. They sell mobile telephony - voice, sms, and data - and their _prime objective_ is to make it as easy as possible for their customer to spend as much money doing that as possible. Making you wait five days to get reconnected to "your number" when you have, for whatever reason, lost control of it is just not going to happen. They'll move mountains to get you back onto your data/voice plan before you've walked out of the store.
Nobody ever advertised their phone/sms plans as "banking grade secure". Telcos have been telling us for years that they are explicitly _not_ secure for that:
https://www.itnews.com.au/news/telcos-declare-sms-unsafe-for...
Communications Alliance chief executive John Stanton, representing the interests of mobile providers Telstra, Optus and Vodafone, took the extraordinary step of of declaring the technology insecure in the wake of numerous reports of Australians being defrauded via a phone porting scam first uncovered in Secure Computing magazine.
"SMS is not designed to be a secure communications channel and should not be used by banks for electronic funds transfer authentication," Stanton told iTnews this week.
Telcos are not interested in securing that, they get _way_ more complaints from people who lost/broke their phone who want their replacement one to work RIGHT NOW, than they do from people who got defrauded with a sim porting attack. And the first group of people are spending _way_ more money collectively than the second, so of course telcos will continue to make it quick and easy to sim port.
Everybody else needs to deal with that. While sms 2FA is marginally better than not having any 2FA at all, it's not the telco's problem if you choose to use it to "secure" your $100k worth of crypto. In my mind, a large part of the blame here goes to COinbase for even offering it. I'm also looking at your PayPal...
This is pretty easy for the telco to prevent, though. Your existing telco should simply phone you and ask if you wish to leave them before letting the number get ported out.
Note that all telcos will prevent the number being ported out if you owe them any money on the account.
Wait really? Is there a way to force yourself to perpetually owe them a small amount of money then? Could be really worth the money.
The comment you replied to appears to be discussing porting a number to a different provider which is very different and doesn't happen same-day.
I used to believe this too. Until this morning. Then I realized something and now I'm not so sure: if I don't have SMS 2FA at all, then my phone line is less to become an attack target. Meaning I'm less likely to have to deal with the collateral damage of lost accounts, files, etc. So is it really better to have that SMS 2FA? Especially if you weren't ever having problems securing your stuff before it came along?
Funny because that's exactly what happens in France when you do so. I must have sounded a bit dumb when I asked when my number would be active when I changed from Tello to Verizon. I couldn't believe it was effective right away.
Yes! Many password managers (at least KeePassXC/KeePass with plugin) can store and create TOTPs. The underlying keys can be manually shown and entered elsewhere if needed, and can be backed up with everything else that's valuable.
> Print out 2-factor backup codes, put them somewhere safe, maybe split them in 2 and put half of the codes in one place, and half in another. Think through possible problems. It really sucks to have your house flood, then find out that your phone with the 2-factor app on it was destroyed, and your backup codes ruined as well...
Off site and offline backups are a good thing to have, especially with fire and water proof lockboxes. (think encrypted external drive lying around at work or at family/friend's house)
Personally I don't really like this feature and urge people to avoid it for "high security accounts".
It's not a "second factor" if it's stored and input using the same device and authentication information as your "first factor" (your username and password).
That's not to say it's useless, at the very least it's another layer that attackers have to figure out. But the true benefits of 2FA come from needing multiple devices to access accounts. If all of the factors are stored in one program on one device, then in the situation where that device/program is cracked, the attackers have everything.
Still, if you are going to choose between no 2FA and "2FA stored in your password manager", choose the password manager! And if you are going to choose between SMS-2FA, and the password manager, choose the password manager! But if you really want better security for not much more work, store your 2FA on a different device!
I feel you're not portraying the trade-off accurately so I'll try to clarify.
It's not merely better because it's just "another layer to figure out". That's what you would get with 2 passwords. It's not what you get with 1 password + 1 OTP.
With OTP you're protected against your password being logged and used later on e.g. an untrusted or breached machine (say, at a library). I'd hazard to guess that dealing with a passive adversary who's time-separated from you is FAR more common/likely than having your actual password database stolen or cracked somehow. Meaning it's still quite a significant benefit to having OTP.
Authy, from what I understand, requires a phone number as backup, meaning it could be compromised by the same method
Google authenticator can't be backedup, which is royally annoying when you change/lose devices
Lastpass has some security issues, and one well known comment here has recommended no one use it.
I heard someone say they use Duo security: does that let you store codes? When I looked it just seemed to lock various services
Every account I have setup with TOTP I also make sure to print out the recovery codes and put them in a safe, and use them if my device is ever destroyed. When I switch phones (which for me happens maybe once every 2-3 years at most), I go through the shitty process of transferring the TOTP codes over to the new device, but it doesn't really take all that long (it took me an hour to do it for about a dozen accounts last time I did it), and I'd much rather not have any of it uploaded anywhere.
You can print out the QR code or save that somehow during setup and use that to setup TOTP codes on other devices (or the same TOTP on multiple devices), but I tend not to do that as recovery codes work just as well, and they notify you if they are used (unlike a TOTP setup QR code). I did have to store the QR code for one account that doesn't provide recovery codes, but it's overall not that much extra work.
As a bonus, the backup is just an encrypted sqlite DB (with dirt-simple schema), so you're not tied to some inscrutable proprietary format, and can easily extract the tokens if you want to use a different app/service.
Means I don't have to worry about phone upgrades and such, and if the Yubikey were to stop working I still have it on my phone
I have this in case my yubikey ever dies and takes my totp codes with it.
So many people don't seem to understand this - I was trying to use U2F yubikeys on gitlab a while back only to discover they force you to enable 2FA first for account recovery, this completely defeats the purpose of hardware auth, it's not supposed to be for convenience, security is only as strong as the weakest link, 2FA is very weak.
+1. I lost a phone and with it my Cloudflare 2FA. For some reason, Cloudflare won't let you contact tech support without logging in. There is no contact info for support on their website, AT ALL, so if you can't log in, you're fucked.
Unfortunately, when you search on Twitter, people are going bananas over having to wait a few days to get their Apple account reset... so I definitely get why not more companies are doing this.
Once they have your number ported getting it back will take, at least, a few days; during which, they'll have unfettered access to anything that uses your mobile number to authenticate.
Use a dedicated 2FA application on a device you physically control and _write down_ the backup keys somewhere physically safe.
An attacker can call support, give them plausibly correct information gleaned from public sources, and nicely claim to have forgotten the answers to your recovery questions ("Oh, it might have been a jumble of letters and numbers... silly me..."). There are enough incorrectly trained support people who will let this through to make the tactic effective on average.
Your point is obviously correct, but everything is so hopelessly broken that it almost doesn't matter in practice.
Does it need to be? Seems most of it could be avoided if the cellular service required a visit at the store with an ID card to clone a SIM card.
Since USA has this "root of trust" problem, it's also unreasonably easy to obtain fake USA IDs since you (again) can impersonate people simply with "something you know" even for the purposes of obtaining legitimate IDs. It's not so easy elsewhere (e.g. if you claim you're me and have lost all ID, they'd just check biometrics before reissuing ID). Proper checks of IDs (+ verification of lost&stolen IDs databases) can ensure that identity theft cases are very rare. The identity theft epidemic isn't general worldwide, it's mostly a regional issue specific to USA and some similar countries.
Financial institutions offer it to sometimes - my credit union requires the account password, or a visit to a branch to show ID - no amount of personal info will allow you access.
Otherwise, what would happen in the frequent case where users forget their pin?
If by "other information" you mean "come into a store and show a government issued photo ID" you are correct. That's a fairly high bar to clear.
That's the way my carrier does it, and I assume if they violate their own procedures I could evaluate my legal options... though as a practical matter I use a VOIP # which requires a 2FA protected login to port out for vendors that force me to use SMS 2FA.
(Because no one would lie about that)
However I believe their "OneTouch" system (e.g. Twitch & Namecheap) is linked to phone numbers only, so that could be breached via SMS.
I'd recommend using a standalone 2FA app which can be backed up to your own cloud storage. (e.g. Google Drive/Dropbox)
You can set up Google Authenticator (or Authy) and a Yubikey as 2FA sources, then remove your phone number.
Much to my surprise, I was able to do this with PayPal where I set up two Symantec VIP Access IDs and was able to remove the phone number.
I wish I could do this with other accounts.
U2F is the current state of the art for 2FA. App/Device-based 2fa (krypton, Google App’s “approve on other device”, authy’s “approve on other device”, keybase, et c) are second.
TOTP is in a lot of ways more trouble than it is worth.
I lost money when MTGox went under and made some online posts (on reddit, I think) several years ago. Maybe this is what caused me to be targeted?
This weekend a malicious actor posing as the account holder on my account was able to get my number transferred to his phone. At&t fraud says this happened at a store, and the user had the last 4 of one of my family member's social security number, as well as a fake id. I'm not sure I believe this, but will request more info in writing.
I regained access to my account. The attacker came from IP 216.162.42.85 (santa clara california)
They entered my email and according to google activity logs immediately went after my coinbase account. They got in (joke's on them I didn't have anything). Then they searched my email for 'btc', and also made a visit to my bank website. They weren't able to get access.
As far as I can tell, they were in and out within 10 minutes. I wonder if this was related to the author's experience?
https://support.google.com/voice/answer/1065667?hl=en
Weirdly, you can't port a Gsuite google voice # to a gmail account. (I looked into it when considering canceling my Gsuite account)
I hoped so too but someone replied to me that they can:
sorry - how does that work? what's the platform / messaging service?
I wish more people knew that their entire identity hinges on a store clerk at AT&T.
Unfortunately many places are actively refusing to work with Google Voice. I got a message from Bank of America saying specifically that they're removing Google Voice support:
> You can't enroll in Zelle with a landline, Google Voice or VOIP (voice over internet protocol) phone number. (Section 3.C.3 Enrolling in the Service)
This follows with some other unnamed (because I don't remember them) services which also refuse to work with Google Voice.
That's really unfortunate because I've been using Google Voice for nearly 10 years without issue until recently (when companies specifically remove support...)
Security is becoming so difficult to balance with an every day life... I don't know how anyone can remember everything that they're "suppose" to know about security.
Another common tactic to watch out for: Repeated calling of your phone to annoy you enough so that you switch it off/silent it. That can give the attacker enough time where you don't notice the swap.
His summary of how to avoid having this happen to you:
* Use a hardware wallet to secure your crypto
* SMS-based 2FA is not enough
* Reduce your online footprint
* Use Google Voice for 2FA
* Create a secondary email address
* Use an offline password managerI like this idea, insofar as the Voice number is not vulnerable to the SIM port attack.
But then I worry that it's yet-another-thing I'm to my Google account, which Google could always shut down at a moment's notice, with no explanation, and no recourse.
https://www.silvermillerlaw.com/current-investigations/crypt... comes up on a search and says they'll do contingency in cases like this. Got nothing to lose.
In Sweden I switched to another carrier, still keeping the number in the same name. To do that I got a text message with a code I had to input to initiate the process.
When I ported my phone number from my father to me within the same carrier when I turned 18 that required the same confirmation to initiate the process and signed request/approval both from me and my father posted to the company, with associated emails about the process.
This isn't even hard? This is just basic steps to prevent identity theft....
The last time I had a phone stolen, I went to the carrier's store, they checked my ID, and gave me a replacement SIM. And the things is, if the customer service representative is empowered to do that, they could also be bribed by the attacker.
If you don't have an account you need to contact customer service, and to get through there they most likely authenticate you based on your SSN and an already active app on your phone (BankID) where you input your personal password.
This has actually created problems when people get their stuff stolen abroad. The ID application is authenticated using your bank and a device using your physical bank card, a generated number from the webpage and your pin and then the generated number is put into the webpage. So if you get both phone and card stolen it's essentially impossible to get into your accounts until you can get a new one posted to you. Especially fun if your bills end up in a digital mailbox requiring that login....
Using that app is how essentially all identification is done in Sweden since it's based on an already approved physical device and a personal password. With your bank as insurance that the information is correct based on your physical bank card and the account associated to it.
Maybe the Tele2 attacks made them finally sort things out.
The prevention seems to be either through BankID authentication or actually calling/texting the number being forwarded to make sure the request is legitimate.
$100k is a lifetime's worth of money in some countries, and it can justify a few months worth of recon.
Somehow making them change my contact details would just end up with the bills being sent to the wrong place, if you still have paper bills and don't have it automatically paid or goes to a digital mailbox.
Exchanges get hacked or are victims of internal fraud at a level that is far beyond any acceptable risk. https://coinsutra.com/biggest-bitcoin-hacks/
If you have any kind of serious crypto holdings, you should either be using hardware wallets or a PC that you only use for crypto. Nothing else. * Buy crypto, transfer to your PC, turn off PC.
Now if the whole thing is tanking and you want to transfer your entire savings to try and ride the wave you are already too late if your money is not already on an exchange and you shouldn't be 100% swing trading anyway.
Just my opinion on how I handle it.
For Bitcoin you should always aim to use the lowest fee possible, and use replace-by-fee (RBF) if a transaction is taking too long.
This warning has been publicly repeated hundreds of times since 2010, yet people still insist on ignoring it.
The author didn't lose anything. He gave Coinbase his bitcoin in exchange for a promise to pay it back. That deal backfired.
> I knew the risks better than most, but never thought something like this could happen to me.
There's knowing the risk, and then there's knowing the risk. I'd suggest that the author didn't really know the risk, or he would never have considered leaving such a valuable asset in the care of an organization so ill-equipped to safeguard it.
If this were real money or real assets, he'd be able to call his bank and be made whole by the close of business, I wager. Instead he's out a down-payment, SFYL.
I can't believe these shenanigans are allowed to play out as though we're all okay with this being the future of currency.
Cars are designed to travel at lethal speeds. If you were reckless and killed someone or yourself, do you also declare it to be an "insanely problematic technology"? The problem here is that people are not aware of the risks associated with cryptocurrencies and so are not taking the required precautions. After all, you can be pretty reckless with your credit card numbers or bank login and still be fine, because the finance system has an undo button for everything.
>This is the fundamental problem with crypto, it's irreversible and decentralized. These aren't features, they're bugs.
I wouldn't call them "bugs", just design decisions or trade offs. Bug implies it's somehow fixable, but if it's not. What if you want to make an irreversible payment, or want to be able to send money to whomever you want without the government stepping in the way, all while being trustless? Is there a way to achieve that, and still being able to hit undo when you make a mistake?
Possibly: see the numerous self-driving efforts underway.
More aptly though, I would declare it problematic if I couldn't drive 10 feet without someone carjacking me in my ostensibly armored car, or if pressing the button on my radio caused the car to explode. I'd call that 'problematic' because if it were my fault, I'd be in jail, and if not, the automaker would be on the wrong end of a huge lawsuit.
You know who we have to thank for their current level of safety? The DOT, NHTSA and legal system.
> The problem here is that people are not aware of the risks associated with cryptocurrencies and so are not taking the required precautions.
He had his coins on probably the only legitimate exchange in all of crypto. He had 2fac. He had 2fac on his gmail. If this isn't sufficient to keep your money protected, we need to stop blaming the victim. He's probably one of the most competent technical individuals owning crypto. If he can't keep it safe how on earth would your grandmother?
> After all, you can be pretty reckless with your credit card numbers or bank login and still be fine, because the finance system has an undo button for everything.
Isn't that awesome? We've recognized people make mistakes and created for them a path to remedy said mistakes. Pretending they don't happen and that it's the victims fault if they do isn't a replacement.
> What if you want to make an irreversible payment.
Wire transfer. You can opt in to irreversibility, it's not the default, and that's completely reasonable IMO.
> ...or want to be able to send money to whomever you want without the government stepping in the way.
AKA breaking the law. Yes, you shouldn't be able to send money to people on the OFAC list, to terrorists, or to sanctioned countries. That's fine with me, and all your fellow citizens. That's why we have those laws. Let's not mince words, "sending money to people the government doesn't want" is financing international terrorism, narcotics trafficking, human trafficking and so on. No, you shouldn't be able to do that.
> ...all while being trustless?
Again, why do you need this without the illegal use cases? Either way PoW cryptos aren't trustless, Beijing has over 80% of the hash power one strongly worded memo away. Decentralized and trustless are not a feature of Bitcoin or most other cryptocurrencies. They are centralized in the PRC. You would give up sovereign control of your money system to the PRC?
> Is there a way to achieve that, and still being able to hit undo when you make a mistake?
No, you shouldn't be able to break the law. An open challenge to all crypto advocates: Provide me one legal use case better suited to cryptocurrency than the US dollar.
Sending money to people overseas without extortionate fees. Surprisingly not everyone overseas is linked with international terrorism as you imply.
Unless you're trying to send money to North Korea that wasn't my implication at all, I have family overseas to whom I manage to send money without crypto or getting overcharged.
There are tons of international remittance services already including Andreesen-backed TransferWise which charges ~0.85% or less to move money internationally. Much less than the sum total of the cost of buying coins on an exchange in one country, paying an on-network transaction fee, risk of huge swings in the asset value and fraud along the way and one more exchange transaction fee in the destination country.
Generally even WU is quite competitive. In markets where they appear pricey the cost is usually to de-risk things like political issues which are all borne by crypto too but opaquely.
For instance, the USD-INR corridor is almost fee-free on all services.
If you've got a ton of money to move, you may be best off opening an Interactive Brokers account and performing the exchange there. They take a commission minimum of $2, or 0.002% ($2000 per million) for the trade. [1] It's a $5.1T per day (legitimate) market after all.
This is not a particularly good example, it's a solved problem.
[1] https://www.interactivebrokers.com/en/index.php?f=1590&p=fx
Check your privilege, as some might say
People want the convenience of being able to trade while also wanting security. Eat the cost of transferring from a hardware wallet.
Coinbase != bank.
The banking system has a safety net for recovery of stolen funds. Coinbase has pretty much jack squat in that sense.
True, Coinbase is insured against loss from its hot wallet. But if Coinbase were to suffer a loss from its cold wallet, you'd be left with zilch.
Likewise, Coinbase's terms of service put all of the responsibility for security on you, the user.
Your bank is a different story. It's FDIC insured. It has in place numerous security measure that enable it to claw back any digital theft and make you whole.
The author has to eat the loss, as per the user agreement.
[0] https://gimletmedia.com/shows/reply-all/v4he6k/130-the-snapc...
2FA by SMS is terribly insecure. Numerous security researchers recommended never using it. Using phone numbers as primary authentication mechanism is insecure and never should be used. Phone numbers can be spoofed, SMS messages can be intercepted, SIM port attacks can and will happen. If your email or banking accounts depend on 2FA by SMS, especially when SMS can be used to reset the password — disable it now. Avoid it like plague.
More than that — if your account has significant value that you absolutely can’t afford to lose, you shouldn’t use _any_ 2FA services linked to your phone, at all, including Google Auth. Your phone can be lost or stolen anytime. Use a dedicated device which you don’t take with you all the time.
Alliant Credit Union, for example, only just rolled out SMS-based 2FA in the past ~year. No TOTP/U2F/FIDO* options at all (in fact, according to https://dongleauth.info/, exactly zero major banks/CUs in North America support anything better than SMS or TOTP).
When I can lock my GitHub account more securely than my _money_, it's a bit (read: lot) depressing.
If security engineers at cryptocurrency firms are getting hacked, what hope do mom & pop user have? And once your money is stolen, you have basically zero recourse and no way to reverse the transaction. I know many proponents consider that a feature, but I'm telling you for the average user, it is absolutely a bug.
Could the victim monitor where the bitcoin (we assume) went to using the public blockchain record? Then, trace it every step of the way (and in whatever chunks it divides into) until it reaches the account of a publicly identifiable entity? At that point, there might be legal recourse in recouping stolen goods (at least, this is how it works in the UK with stolen physical goods.. even if someone "legitimately" buys them, they can be reclaimed).
Imagine you stole 10 btc and you split it to 10 outputs of 1 btc each. Then you use 2 of them to perform a coinjoin with several other people where in a single transaction 10 inputs of 1 btc (2 of them yours) produce 10 outputs of 1 btc (again 2 of them yours). There is no way to tell which coin is which anymore. Of course this requires some degree of interaction with other people but in other coins such as grin that use the mimblewimble protocol this happens automatically for every block.
Another thing you can do is try to do an atomic swap with someone on another blockchain i.e Litecoin. In this case you send your coins to a specific script address, the other person sends his LTC to another script address and you effectively swap BTC with LTC.
Now that's the real problem. Coinbase acts like a bank or a broker/dealer, but isn't regulated like one.
Cryptocurrency designers seem to think that banking was designed as a mistake without anyone thinking. That laws people wanted were just unfortunate side effects.
Coinbase will pay out via PayPal, so someone with access to an account's credentials could pull of this scam without involving cryptocurrency at all.
Now if Coinbase was regulated by the SEC as a "broker/dealer", which is what they really are, they'd be subject to SEC regulations on fraud, and would have SIPC insurance to protect the customer up to $250K.[2]
Coinbase does, in fact, have a New York State "BitLicense", which makes them subject to various New York State regulations. Among other things, transactions larger than US$10,000 have to be reported to the New York State Department of Financial Services within 24 hours, and Coinbase is subject to rules about cybersecurity, fraud, and its activity as a custodian of the funds of others. You can complain to the New York State Department of Financial Services.
DFS pulled Bittrx's license last month and gave them one day to get out of New York State.
[1] https://www.westernunion.com/us/en/fraudawareness/fraud-ques...
I found out the hard way it takes over a week of time and multiple verifications and contacts to reset my authenticator when my old phone was broken; as it should be.
And he didn't know about SIM attacks.
And he kept $100k of irreversibly transactible "money" on an exchange, despite their history of being hacked.
This is what happens when you get involved with organized crime (which I consider Bitcoin to be): you become a victim.
His lessons learned is of course not that reversible transactions is something good, not a "mistake" in the fiat banking system.
Here in Italy you must provide your ID card and wait a couple days for the carrier to check the data. Goverment websites even use 2fa as a proof of your physical identity
I wonder why he'd think that. Disregarding the risk of you getting phished/hacked (which you can prevent), there's nothing you can do about coinbase getting hacked (eg. mt gox), running away with the funds, losing their funds because of incompetence (eg. quadrigacx), or locking your account and taking months to unlock.
Definitely sucks to have $100k stolen.
Customer support for personal gmail accounts is almost nonexistent. Fortunately I had a friend who worked at Google and had them put a word in on my reset request otherwise I would have been SOL.
Disable phone number resets and switch to Google Authenticator w/ backup codes ASAP.
> Enter the last password you remember using with this Google Account
Which of course the attacker knows because they changed your password. If they don't know that you can click try again and go through the various two factor methods set up (hardware token, totp code, sms) and then the very last and also terrible option is putting in the date the account was created. If your account has been owned the attacker likely knows this too. Advanced account protection is pretty much the only option if you've had your account breached at any time.
> Which of course the attacker knows because they changed your password.
The site asks for the last password you remember using, not the last password that was used (presumably by the attacker). I don't think this is as bad as you think; the attacker doesn't likely know the previous password, or else they would not have needed to hijack your phone number.
https://www.fiercewireless.com/tech/project-verify-will-brin...
With this the attackers get direct access to all your services once they socially engineer or identity theft attack your cell account once.
something like what CF (and others) are doing with domains
The most notable example is when a certain person's SIM card was reissued 4 times within 2 days in different cities by criminals while the owner was trying to restore access to her phone.
To prevent it, some Russian banks have agreements with carriers that allow them to check SIM card's identifier and detect whether it was reissued. If such situation is detected, the bank doesn't allow to use new SIM card to confirm operations.
Some carriers block new SIM cards from receiving SMS for 24 hours and send a SMS with notification to an old SMS card so that the owner can restore access. Also, one can restrict a list of locations where your SIM card can be reissued.
I was wondering how the attacker found out this guy's phone number, so I searched my own online. Disconcertingly, it was visible on truepeoplesearch.com. So I also submitted a record removal request there.
I mean, I think the best option is to not own any assets that can be fraudulently, irreversibly transferred away. That's what I do. But a little extra security won't hurt.
For anything important I use air-gapped hardware tokens for 2FA. If a brokerage or bank doesn't support hardware token 2FA they don't get my business, full stop.
At the last startup I worked for, which was rather security sensitive, the leadership actually insisted on employees setting up gmail w/SMS 2FA on their smartphones. I kept using backup codes and never set it up.
The goal was to help beginners in security and technology as a whole understand why SMS based two-factor is insecure and should be avoided.
It's just a couple of paragraphs in a larger post on securing your SSH sessions but hopefully it's of interest.
Because reversibility is a good thing.
In other words, crypto-currency exchanges could do the same thing (but then they'd almost certainly have/want to charge for that).
Double-entry bookkeeping is also, ideally, irreversible.
Sure. When bank accounts get hacked sometimes the bank just eats the cost, but if $100k goes to another bank they'll contact that bank to have the money be clawed back.
Now I say "reversed", but the end goal I mean is "the money was transferred back" because it's traceable and doesn't require the cooperation of the receiving account holder. Not that it gets "undone" in double-entry bookkeeping.
Indeed bank hacks have lost some money when the "reversal" incurred currency fluctuation effects. (which could have gone the other way, too).
Also no, regular bank transfers are very reversible because courts can order it so. The justice system can order accounts frozen. With cryptocurrency the illusion is "math is the ultimate arbiter", but of course "math" can't solve "so what happens if one party broke the law", but is forced to answer "well... I guess they win, then".
Also compare smart contracts. You can make an illegal contract. Say the equivalent of selling yourself into slavery. Smart contracts want there to be no court that says "actually, that's slavery, and this contract is void, also the money must be returned". To think that "math" can provide justice better than a justice system is not just holding low esteem for justice systems in general. It's anarchy, and tyranny by exploitation.
"People" are not lawyers, which is why some things are not allowed in contracts. "People" are not coders, which is why smart contracts are also not a thing that will happen (on a scale cryptocurrency people dream of).
I hoped this too but someone commented to me recently that GV is not immune to porting attacks:
Out of curiosity are there any decent free/cheap voip services that support 2FA aside from Google Voice? Using the same provider for email + recovery codes makes me a little nervous.
Tying all security to only an email is dumb for important services.
The standard person today isn't capable of managing multiple secure tokens, and actually keeping them separate.
One smashed phone, and truly secure accounts would be lost forever, or require significant resources on the part of the provider to re-verify people's identities.
> I knew the risks better than most, but never thought something like this could happen to me
This also explains why this article is useless as a warning. Someone who will be hacked like this in the future is reading now this article and saying "hmm, I should be securing my holdings against this, but I don't have time now, and this won't happen to me right away, I'll look into it next week"
It's like the countless articles which appear after backup failures. "I knew I was supposed to test restoring from backup, but...."
It's also a relatively new thing.
People who cry about government overreach seem to rarely ponder why it is there in the first place. Well, TFA shows why.
I still maintain as I did several times here in the past: bitcoin (and in general, crypto"currencies" because they are not currencies) are a scam, a new kind of scam for sure but a scam nonetheless. There are simply no (legit) use cases.
I'd argue that Bitcoin's lightning network is gaining traction, and it accomplishes a lot of what you are asking for.