Canadian Bitcoins Social Engineering Theft: Difference between revisions

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{{Imported Case Study 2|source=https://www.quadrigainitiative.com/casestudy/canadabitcoinssocialengineeringtheft.php}}
{{Case Study Under Construction}}{{Unattributed Sources}}
{{Unattributed Sources}}


[[File:Canadianbitcoins.jpg|thumb|Canadian Bitcoins]]Canadian Bitcoins offers a cryptocurrency brokerage service based in Ottawa. Their wallet was hosted in a prestigious Rogers data center with an impressive array of security. However, one staff member there was fully accommodating to a James Grant impersonater, and granted him full access to the server, where he proceeded to steal the full $100k balance of the company hot wallet.
[[File:Canadianbitcoins.jpg|thumb|Canadian Bitcoins Logo/Shop]]Canadian Bitcoins offers a cryptocurrency brokerage service based in Ottawa, Canada. Their wallet was hosted in a prestigious Rogers data center with an impressive array of security. However, one staff member there was fully accommodating to a James Grant impersonater, and granted him full access to the server, where he proceeded to steal the full $100k balance of the company hot wallet.


This exchange or platform is based in Canada, or the incident targeted people primarily in Canada.<ref name="kylegibson-86" /><ref name="bitcoinexchangeguide-218" /><ref name="coindesk-4032" /><ref name="facebook-4041" /><ref name="cbinsights-4042" /><ref name="bittrust-4043" /><ref name="canadianbitcoins-4044" /><ref name="ottawacitizen-4045" /><ref name="financialpost-4046" />
<ref name="kylegibson-86" /><ref name="bitcoinexchangeguide-218" /><ref name="coindesk-4032" /><ref name="facebook-4041" /><ref name="cbinsights-4042" /><ref name="bittrust-4043" /><ref name="canadianbitcoins-4044" /><ref name="ottawacitizen-4045" /><ref name="financialpost-4046" /><ref name=":0">[https://www.canadianbitcoins.com/2014-03-18-statement.php Statement - Canadian Bitcoins] (Accessed Nov 13, 2024)</ref><ref>https://www.huffpost.com/archive/ca/entry/canadian-bitcoins-blames-rogers-for-hack-that-cost-100-000_n_4995030</ref><ref>https://www.reddit.com/r/canada/comments/2179c3/canadian_bitcoins_blames_rogers_for_hack_that/</ref>


== About Canadian Bitcoins ==
== About Canadian Bitcoins ==
"Canadian Bitcoins is a cryptocurrency brokerage allowing customers to buy or sell bitcoins, litecoins and other cryptocurrencies." "Fill out the BUY form on the Buy/Sell page. Specifying the amount of $CAD you wish to spend on Bitcoins/Crypto, and your wallet address that you want to receive the purchased crypto at. Choose your payment method, and follow the instructions that are emailed to you. When we receive the payment, we will deposit the Bitcoins/crypto to the provided wallet address." "Please note orders must still be approved manually on our side before any coins are sent, typically Mon-Fri 9-5." "We can currently only service Canadians, living in Canada."
"Canadian Bitcoins is a cryptocurrency brokerage allowing customers to buy or sell bitcoins, litecoins and other cryptocurrencies."


"Canadian Bitcoins’ servers were being run by a company called Rogers Data Centre (who were technically in the process of taking the data centre over from its previous operator, Granite Networks)." "Rogers bought Granite Networks for $6.25 million in late September." "The 28,000-square-foot centre, located on Hazeldean Road in Bells Corners, was built to some of the highest security standards in the industry."
"Fill out the BUY form on the Buy/Sell page. Specifying the amount of $CAD you wish to spend on Bitcoins/Crypto, and your wallet address that you want to receive the purchased crypto at. Choose your payment method, and follow the instructions that are emailed to you. When we receive the payment, we will deposit the Bitcoins/crypto to the provided wallet address." "Please note orders must still be approved manually on our side before any coins are sent, typically Mon-Fri 9-5."


"The Ottawa police are investigating an Oct. 1, 2013, incident at Canadian Bitcoins, when someone opened an online chat session with a technical support worker at Granite Networks, now owned by Rogers Communications, and claimed to be Canadian Bitcoins owner James Grant." "A hacker was allegedly able to steal 149 bitcoin, or around $100,000 at the time, from Canadian Bitcoins by messaging Rogers Data Centre and just asking for access to the servers."
"We can currently only service Canadians, living in Canada."


"With nothing more than a chat session and smooth talk, a crafty cybercriminal convinced an attendee at Rogers Data Centre to reboot the Canadian Bitcoins server in fail safe mode, bypassing all security measures."
"Canadian Bitcoins’ servers were being run by a company called Rogers Data Centre (who were technically in the process of taking the data centre over from its previous operator, Granite Networks)." "Rogers bought Granite Networks for $6.25 million in late September." "The 28,000-square-foot centre, located on Hazeldean Road in Bells Corners, was built to some of the highest security standards in the industry."
 
"The Bitcoin thief started a customer service chat session with Granite Networks, the company hosting Canadian Bitcoins’ server, and claimed to have a problem with it." "The hacker pretended to be Canadian Bitcoins CEO James Grant over instant message – just by saying “I am James Grant”, there wasn’t any fancy trickery going on – and was given access." “It’s ridiculous,” said the real James Grant when asked about the incident. “There was absolutely zero verification of who it actually was.” "The server was rebooted in safe mode, which bypassed the all-important security measures that would normally keep it safe."


"According to a text copy of the chat session obtained by the Citizen, at no point during the nearly two-hour-long conversation was the caller asked to verify his identity. After being asked, the technical support worker gained access to Grant’s locked server pen, plugged in a laptop and then manually gave the fraudster access to Canadian Bitcoins servers, where he cleaned out a wallet containing 149.94 bitcoins, valued at around $100,000."
"Canadian Bitcoins only keeps a small amount of the currency in its active online wallet to allow for small trades and transfers. The vast majority of customers’ bitcoins are securely stored in an inactive wallet which is locked in a safety deposit box. To access those reserves, customers must leave notice."
 
"Grant said the damage could have been far worse. But Canadian Bitcoins only keeps a small amount of the currency in its active online wallet to allow for small trades and transfers. The vast majority of customers’ bitcoins are securely stored in an inactive wallet which is locked in a safety deposit box. To access those reserves, customers must leave notice."
 
"After the intrusion, Grant said he noticed the server had been rebooted several times, but couldn’t access it from the company’s offices. The company’s servers are configured so they are only accessible from Canadian Bitcoins’ head office in Nepean."
 
"In order to check the servers himself, he needed to call two hours in advance to alert Rogers officials about his visit. He then needed a key card to enter the building, enter the lobby, activate the retinal scanner, pass through two more sets of locked doors and then he had to provide a numeric code to unlock the padlocked gate on the cage of his servers."
 
“The situation surrounding this customer is unique to this customer, and does not apply to any other customer of Rogers Data Centres. Rogers has been fully co-operative with authorities in the investigation,” according to a statement from the company. “Rogers Data Centres provides the highest level of security in the Canadian data centre industry. Its security protocol is operationally certified and in accordance with industry best practices. We have reviewed our security processes and continue to work with our customers to make sure they take advantage of all of our security features.”
 
"Canadian Bitcoins covered the $100,000 loss out of their own pocket, Grant said, and moved to get their computer equipment out of the facility."
 
"Rogers said it has offered Canadian Bitcoins a “credit” as a result of the situation. Grant said the credit was nowhere near sufficient to cover the company’s loss and as a result his firm is contemplating legal action."
 
This exchange or platform is based in Canada, or the incident targeted people primarily in Canada.
 
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 ==
== The Reality ==
This sections is included if a case involved deception or information that was unknown at the time. Examples include:
Sometimes all that protects assets is just security theater.
 
* 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 ==
== 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.
"A hacker was allegedly able to steal 149 bitcoin, or around $100,000 at the time, from Canadian Bitcoins by messaging Rogers Data Centre and just asking for access to the servers."
{| class="wikitable"
{| class="wikitable"
|+Key Event Timeline - Canadian Bitcoins Social Engineering Theft
|+Key Event Timeline - Canadian Bitcoins Social Engineering Theft
Line 67: Line 28:
|-
|-
|October 1st, 2013
|October 1st, 2013
|Main Event
|Server Access Granted
|Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.
|The date of the incident where the Rogers Data Centre server was accessed by the imposter<ref name=":0" />.
|-
|-
|
|March 18th, 2014
|
|Public Statement Released
|
|Canadian Bitcoins releases a public statement on the incident in response to questions raised by the Ottawa Citizen<ref name=":0" />.
|}
|}
== Technical Details ==
"With nothing more than a chat session and smooth talk, a crafty cybercriminal convinced an attendee at Rogers Data Centre to reboot the Canadian Bitcoins server in fail safe mode, bypassing all security measures."
"The Bitcoin thief started a customer service chat session with Granite Networks, the company hosting Canadian Bitcoins’ server, and claimed to have a problem with it." "The hacker pretended to be Canadian Bitcoins CEO James Grant over instant message – just by saying “I am James Grant”, there wasn’t any fancy trickery going on – and was given access."
"According to a text copy of the chat session obtained by the Citizen, at no point during the nearly two-hour-long conversation was the caller asked to verify his identity. After being asked, the technical support worker gained access to Grant’s locked server pen, plugged in a laptop and then manually gave the fraudster access to Canadian Bitcoins servers, where he cleaned out a wallet containing 149.94 bitcoins, valued at around $100,000."


== Total Amount Lost ==
== Total Amount Lost ==
The total amount lost has been estimated at $100,000 USD.
The total amount lost has been estimated at 149.94 bitcoins, worth approximately $100,000 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 ==
== 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?
“It’s ridiculous,” said the real James Grant when asked about the incident. “There was absolutely zero verification of who it actually was.” "The server was rebooted in safe mode, which bypassed the all-important security measures that would normally keep it safe."


== Ultimate Outcome ==
== Ultimate Outcome ==
What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?
"After the intrusion, Grant said he noticed the server had been rebooted several times, but couldn’t access it from the company’s offices. The company’s servers are configured so they are only accessible from Canadian Bitcoins’ head office in Nepean."
 
"In order to check the servers himself, he needed to call two hours in advance to alert Rogers officials about his visit. He then needed a key card to enter the building, enter the lobby, activate the retinal scanner, pass through two more sets of locked doors and then he had to provide a numeric code to unlock the padlocked gate on the cage of his servers."
 
"The Ottawa police are investigating an Oct. 1, 2013, incident at Canadian Bitcoins, when someone opened an online chat session with a technical support worker at Granite Networks, now owned by Rogers Communications, and claimed to be Canadian Bitcoins owner James Grant."
 
"Grant said the damage could have been far worse. But Canadian Bitcoins only keeps a small amount of the currency in its active online wallet to allow for small trades and transfers."
 
“The situation surrounding this customer is unique to this customer, and does not apply to any other customer of Rogers Data Centres. Rogers has been fully co-operative with authorities in the investigation,” according to a statement from the company. “Rogers Data Centres provides the highest level of security in the Canadian data centre industry. Its security protocol is operationally certified and in accordance with industry best practices. We have reviewed our security processes and continue to work with our customers to make sure they take advantage of all of our security features.”
 
"Canadian Bitcoins covered the $100,000 loss out of their own pocket, Grant said, and moved to get their computer equipment out of the facility."
 
"Rogers said it has offered Canadian Bitcoins a “credit” as a result of the situation. Grant said the credit was nowhere near sufficient to cover the company’s loss and as a result his firm is contemplating legal action."


== Total Amount Recovered ==
== Total Amount Recovered ==
There do not appear to have been any funds recovered in this case.
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 ==
== General Prevention Policies ==
The problem came about due to a lack of verification on access to key server infrastructure, and could also have been mitigated by running transactions through a multi-sig with a separate system. These funds were in the Canadian Bitcoins hot wallet and stored online. As with all hot wallets, the loss of the entire balance should be planned for. No customer funds were lost, as the balance was all platform funds. (Canadian Bitcoins does not custody customer funds.)
The problem came about due to a lack of verification on access to key server infrastructure, and could also have been mitigated by running transactions through a multi-sig with a separate system. These funds were in the Canadian Bitcoins hot wallet and stored online. As with all hot wallets, the loss of the entire balance should be planned for. No customer funds were lost, as the balance was all platform funds. (Canadian Bitcoins does not custody customer funds.)

Latest revision as of 16:28, 14 November 2024

Notice: This page is a new case study and some aspects have not been fully researched. Some sections may be incomplete or reflect inaccuracies present in initial sources. Please check the References at the bottom for further information and perform your own additional assessment. Please feel free to contribute by adding any missing information or sources you come across. If you are new here, please read General Tutorial on Wikis or Anatomy of a Case Study for help getting started.

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Canadian Bitcoins Logo/Shop

Canadian Bitcoins offers a cryptocurrency brokerage service based in Ottawa, Canada. Their wallet was hosted in a prestigious Rogers data center with an impressive array of security. However, one staff member there was fully accommodating to a James Grant impersonater, and granted him full access to the server, where he proceeded to steal the full $100k balance of the company hot wallet.

[1][2][3][4][5][6][7][8][9][10][11][12]

About Canadian Bitcoins

"Canadian Bitcoins is a cryptocurrency brokerage allowing customers to buy or sell bitcoins, litecoins and other cryptocurrencies."

"Fill out the BUY form on the Buy/Sell page. Specifying the amount of $CAD you wish to spend on Bitcoins/Crypto, and your wallet address that you want to receive the purchased crypto at. Choose your payment method, and follow the instructions that are emailed to you. When we receive the payment, we will deposit the Bitcoins/crypto to the provided wallet address." "Please note orders must still be approved manually on our side before any coins are sent, typically Mon-Fri 9-5."

"We can currently only service Canadians, living in Canada."

"Canadian Bitcoins’ servers were being run by a company called Rogers Data Centre (who were technically in the process of taking the data centre over from its previous operator, Granite Networks)." "Rogers bought Granite Networks for $6.25 million in late September." "The 28,000-square-foot centre, located on Hazeldean Road in Bells Corners, was built to some of the highest security standards in the industry."

"Canadian Bitcoins only keeps a small amount of the currency in its active online wallet to allow for small trades and transfers. The vast majority of customers’ bitcoins are securely stored in an inactive wallet which is locked in a safety deposit box. To access those reserves, customers must leave notice."

The Reality

Sometimes all that protects assets is just security theater.

What Happened

"A hacker was allegedly able to steal 149 bitcoin, or around $100,000 at the time, from Canadian Bitcoins by messaging Rogers Data Centre and just asking for access to the servers."

Key Event Timeline - Canadian Bitcoins Social Engineering Theft
Date Event Description
October 1st, 2013 Server Access Granted The date of the incident where the Rogers Data Centre server was accessed by the imposter[10].
March 18th, 2014 Public Statement Released Canadian Bitcoins releases a public statement on the incident in response to questions raised by the Ottawa Citizen[10].

Technical Details

"With nothing more than a chat session and smooth talk, a crafty cybercriminal convinced an attendee at Rogers Data Centre to reboot the Canadian Bitcoins server in fail safe mode, bypassing all security measures."

"The Bitcoin thief started a customer service chat session with Granite Networks, the company hosting Canadian Bitcoins’ server, and claimed to have a problem with it." "The hacker pretended to be Canadian Bitcoins CEO James Grant over instant message – just by saying “I am James Grant”, there wasn’t any fancy trickery going on – and was given access."

"According to a text copy of the chat session obtained by the Citizen, at no point during the nearly two-hour-long conversation was the caller asked to verify his identity. After being asked, the technical support worker gained access to Grant’s locked server pen, plugged in a laptop and then manually gave the fraudster access to Canadian Bitcoins servers, where he cleaned out a wallet containing 149.94 bitcoins, valued at around $100,000."

Total Amount Lost

The total amount lost has been estimated at 149.94 bitcoins, worth approximately $100,000 USD.

Immediate Reactions

“It’s ridiculous,” said the real James Grant when asked about the incident. “There was absolutely zero verification of who it actually was.” "The server was rebooted in safe mode, which bypassed the all-important security measures that would normally keep it safe."

Ultimate Outcome

"After the intrusion, Grant said he noticed the server had been rebooted several times, but couldn’t access it from the company’s offices. The company’s servers are configured so they are only accessible from Canadian Bitcoins’ head office in Nepean."

"In order to check the servers himself, he needed to call two hours in advance to alert Rogers officials about his visit. He then needed a key card to enter the building, enter the lobby, activate the retinal scanner, pass through two more sets of locked doors and then he had to provide a numeric code to unlock the padlocked gate on the cage of his servers."

"The Ottawa police are investigating an Oct. 1, 2013, incident at Canadian Bitcoins, when someone opened an online chat session with a technical support worker at Granite Networks, now owned by Rogers Communications, and claimed to be Canadian Bitcoins owner James Grant."

"Grant said the damage could have been far worse. But Canadian Bitcoins only keeps a small amount of the currency in its active online wallet to allow for small trades and transfers."

“The situation surrounding this customer is unique to this customer, and does not apply to any other customer of Rogers Data Centres. Rogers has been fully co-operative with authorities in the investigation,” according to a statement from the company. “Rogers Data Centres provides the highest level of security in the Canadian data centre industry. Its security protocol is operationally certified and in accordance with industry best practices. We have reviewed our security processes and continue to work with our customers to make sure they take advantage of all of our security features.”

"Canadian Bitcoins covered the $100,000 loss out of their own pocket, Grant said, and moved to get their computer equipment out of the facility."

"Rogers said it has offered Canadian Bitcoins a “credit” as a result of the situation. Grant said the credit was nowhere near sufficient to cover the company’s loss and as a result his firm is contemplating legal action."

Total Amount Recovered

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

General Prevention Policies

The problem came about due to a lack of verification on access to key server infrastructure, and could also have been mitigated by running transactions through a multi-sig with a separate system. These funds were in the Canadian Bitcoins hot wallet and stored online. As with all hot wallets, the loss of the entire balance should be planned for. No customer funds were lost, as the balance was all platform funds. (Canadian Bitcoins does not custody customer funds.)

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.

References

  1. ↑ 100 Crypto Thefts: A Timeline of Hacks, Glitches, Exit Scams, and other Lost Cryptocurrency Incidents (Jan 25, 2020)
  2. ↑ Bitcoin Scams and Cryptocurrency Hacks List - BitcoinExchangeGuide.com (Mar 5, 2020)
  3. ↑ The 9 Biggest Screwups in Bitcoin History (Oct 2, 2021)
  4. ↑ https://www.facebook.com/Canadianbitcoins/videos/445172325995189/ (Nov 13, 2021)
  5. ↑ Canadian Bitcoins - Headquarter Locations, Competitors, Financials, Employees (Nov 13, 2021)
  6. ↑ Canadian Bitcoins - 26 Reviews - Bitcoin Exchange - BitTrust.org (Nov 13, 2021)
  7. ↑ How it Works - Canadian Bitcoins (Nov 13, 2021)
  8. ↑ Ottawa bitcoin exchange defrauded of $100,000 in cyber currency | Ottawa Citizen (Nov 13, 2021)
  9. ↑ Ottawa bitcoin exchange defrauded of $100,000 in easiest heist ever | Financial Post (Nov 13, 2021)
  10. ↑ 10.0 10.1 10.2 Statement - Canadian Bitcoins (Accessed Nov 13, 2024)
  11. ↑ https://www.huffpost.com/archive/ca/entry/canadian-bitcoins-blames-rogers-for-hack-that-cost-100-000_n_4995030
  12. ↑ https://www.reddit.com/r/canada/comments/2179c3/canadian_bitcoins_blames_rogers_for_hack_that/
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