Liquid Cryptocurrency Exchange Hacked, Attackers Breach Company Network

One of the world’s largest cryptocurrency exchanges, Liquid, has reported a cyberattack that occurred last week. According to the company, on November 13, 2020, an unknown attacker compromised the email accounts of several employees and ultimately gained access to the company’s internal network.

Liquid’s administration assures that the breach was detected before the hacker was able to steal any funds. However, the investigation revealed that the attacker managed to steal information from Liquid’s database, which contained user data from the exchange.

It has already been confirmed that the hacker obtained users’ real names, home addresses, email addresses, and encrypted passwords. Since the company is still investigating the incident, it remains unclear whether the attacker was able to access users’ identity documents, as all Liquid customers are required to provide such documents when making their first transaction.

“We do not believe there is any direct threat to your accounts, as we use strong password encryption. Nevertheless, we recommend that all Liquid customers change their passwords and 2FA credentials as soon as possible,” wrote company CEO Mike Kayamori.

How the Attack Happened

According to Liquid’s statement, the breach was caused by the compromise of their domain name provider, whose employees fell victim to social engineering and handed over control of Liquid’s account to the hacker. After gaining control of this account, the attacker changed DNS records, redirecting incoming traffic to a server under their control. The company says that in this way, the attacker redirected employees to fake login pages and collected credentials for their work email accounts. The attacker then used these credentials to access employee email accounts and further infiltrate Liquid’s internal infrastructure.

Similar Attacks in the Crypto Industry

Unfortunately, such attacks are not uncommon. For example, in the summer of 2020, the Coincheck exchange suffered a similar DNS compromise. Users were redirected to fake login pages, and the attacker collected passwords for about 200 accounts. In 2018, the MyEtherWallet wallet was affected by a similar attack, and in 2017, the EtherDelta exchange was also targeted.

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