Celsius Network Account Hacked

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Celsius Network

While unconfirmed by Celsius, there is a report from one of their customers who claims to have been hacked out of $82,000 worth of cryptocurrency. If what's claimed is true, it seems like Celsius may have had their DNS compromised and customers redirected to an attacker's website. Attackers can set up proxies on similar looking domains and intercept interactions with the website. Since those interactions might then come from a suspicious IP address, locking the account would make sense. The attacker (who had the password) may have been able to log in later and request the withdrawal. It sounds like they used Wasabi CoinJoin to mix the coins and cover their trail.

This exchange or platform is based in United States, or the incident targeted people primarily in United States.

About Celsius Network

"Celsius Network is a cryptocurrency loan company." "Celsius was founded in 2017 with the mission to harness blockchain technology to provide unprecedented financial freedom, economic opportunity, and income equality for the 99%." "Celsius Network Limited was incorporated on 9 February 2018."

"Celsius is proud to provide a platform of curated services that have been abandoned by big banks – things like fair interest, zero fees, and lightning quick transactions. Our goal is to disrupt the financial industry, one happy user at a time, and introduce financial freedom through crypto."

"Celsius is not a bank, depository institution, custodian or fiduciary and the assets in your Celsius account are not insured by any private or governmental insurance plan (including FDIC or SIPC), nor are they covered by any compensation scheme (including FSCS)."

"Fraudsters redirected email and web traffic destined for several cryptocurrency trading platforms over the past week [prior to November 21st, 2020]. The attacks were facilitated by scams targeting employees at GoDaddy, the world’s largest domain name registrar, KrebsOnSecurity has learned." "The result shows that several other cryptocurrency platforms also may have been targeted by the same group, including Celsius.network. None of these companies responded to requests for comment."

"Lydia-Sweet10, a Reddit user with only posts on her negative Celsius experience, claimed her account was hacked.". "This all started at the same time Celsius DNS servers were taken down in early Nov and they assured everyone their crypto was safe." "Celsius locked me out of my account for a month when I could have been ramping up my security." "I was locked out of my own account since Nov 12th[, 2020] and the theft occurred Nov 30th." "I personally got my Celsius account hacked and over 4 bitcoin ($82000) were stolen." "4.25 BTC was stolen by a “Wasabi” hack that broke up the BTC in smaller pieces and moved it to many wallets."

"The Celsius servers went down in early November and I believe a breach occurred then when hackers were able to get some user names." "Additional security features should have been implemented when you sign up for Celsius. Hodl mode would have definitely helped but security is not where it should be."

"Celsius was very slow to respond and has not managed the problem well at all." "I contacted them MANY times via email and phone with very little to no response during the whole month of Nov." "Here it is three months later and they haven’t really responded in any coherent way."

"I am still trying to get to the bottom of this by hiring a fraud investigation firm." "I hired a fraud investigator and the local police department who subpoenaed Celsius for the records to trace the theft of bitcoin."

"So far Celsius still says they are looking into it 3 mo after the theft with no explanation given." "They say they’re working on it. They were absolutely impossible to get a response from for weeks while I was being locked out of my wallet and emailing them every day as to why." "It’s been very frustrating!"

This exchange or platform is based in United States, or the incident targeted people primarily in United States.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - Celsius Network Account Hacked

Date	Event	Description
November 30th, 2020	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

The total amount lost has been estimated at $82,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

There do not appear to have been any funds recovered in this case.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

General Prevention Policies

The primary failure in the Celsius process was not requesting a universal change of account credentials after the DNS vulnerability was resolved. The DNS vulnerability appears that it may have occurred due to an insider in GoDaddy where the domain was registered. Strong multi-factor authentication on all transactions, including confirmation on addition of withdrawal addresses, can provide additional certainty that it's the real customer making the withdrawal request.

Under our proposed framework, platforms undergo periodic reviews of their security procedures once every 6 months. They have their choice of firm from amongst those approved options, and need to cycle such that firms aren't regularly repeated to get a stronger opinion. A portion of funds are set aside in an industry insurance fund which is available to handle events like these. Each incident would be fully reported so that all platforms can benefit from the knowledge and understanding.

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.