Circle HubSpot Data Breach

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Circle

Circle is one of the most well-known companies, a key backer of the USDC stablecoin. They were reportedly among those companies affected by the Hubspot data breach. They let customers know by email and also issued some public statements. There have been no specific reports of Circle clients or customers being targeted subsequently.

About Circle

Circle is a global financial technology company that aims to create a more inclusive and efficient financial future headquartered in Boston, Massachusetts, known for managing the stablecoin USDC. Founded in 2013 by Jeremy Allaire and Sean Neville, Circle initially focused on peer-to-peer payments technology. Circle aims to create a financially inclusive future by transforming the way money moves and promoting economic growth. Circle's infrastructure offers enterprise-grade digital currencies, providing faster payments, smarter asset management, enhanced liquidity, and tools for developers to build on blockchain. They facilitate the frictionless exchange of value through digital currency innovation.

USDC is the second-largest stablecoin globally and is designed to maintain a stable value of $1, backed by a majority of short-term U.S. government securities. USDC, a digital currency, is revolutionizing the global financial system by providing instant, low-cost transactions to a wider audience. It offers settlement in minutes, near-zero cost transactions, and operates 24/7, making money more accessible. Trusted by global leaders such as BlackRock, Visa, and Mastercard, USDC empowers businesses and builders worldwide to move money in innovative ways. With over $10 trillion in transactions across 190+ countries, USDC is being recognized for its impact. Visa's Head of Crypto, Cuy Sheffield, believes in the importance of evolving payment networks to accommodate new forms of money securely. The Treasurer of UNHCR, Carmen Hett, sees the potential for digital assets like USDC to deliver humanitarian assistance quickly and transparently. Anatoly Yakovenko, the CEO at Solana Labs, praises USDC for facilitating instant, global, and sustainable payment rails. Lisa Nestor, Chief Strategy Officer at Airtm, highlights how USDC enables millions of people to access stable money for earning opportunities.

Circle values transparency, stability, and responsible practices, welcoming clear regulation and engaging with regulators and policymakers. They partner with leading financial companies and provide detailed reports on the backing of their stablecoins, promoting a more stable future for cryptocurrencies. Circle's leadership team consists of experienced individuals from diverse backgrounds, ensuring sustainable growth and innovation. Their board of directors includes members from influential companies such as IDG, General Catalyst, Ernst & Young, and Goldman Sachs, contributing to stability and growth in the new economy. Circle offers Circle Accounts, which provide access to stablecoins and various solutions for payments, treasury, and liquidity, allowing businesses to expand and thrive.

The company has received significant venture capital funding, including a $50 million investment led by Goldman Sachs in 2015. In 2018, Circle partnered with Coinbase to create USDC. Circle Pay, the company's mobile payment platform, allowed users to hold, send, and receive traditional fiat currencies but was discontinued in 2019. Circle acquired the Poloniex cryptocurrency exchange in 2018 but later spun it out, and Justin Sun, founder of Tron, led its acquisition. Circle has licenses in multiple U.S. states and has received a Major Payment Institution license from the Monetary Authority of Singapore. The company has faced criticism for its business practices.

About HubSpot

HubSpot is a CRM platform offering a suite of software, integrations, and resources to connect marketing, sales, content management, and customer service. The platform consists of products that can be used individually or together to achieve optimal results. The Marketing Hub helps with traffic growth, lead generation, marketing automation, and analytics. The Sales Hub provides insights into prospects, automates tasks, and facilitates deal closures. The Service Hub focuses on customer service, connecting with customers, and turning them into promoters. The CMS Hub offers flexible content management for marketers and powerful features for developers. The Operations Hub synchronizes applications, cleans and curates customer data, and automates processes.

HubSpot was founded in 2006 by Brian Halligan and Dharmesh Shah at MIT. The company experienced significant revenue growth, from $255,000 in 2007 to $15.6 million in 2010. They expanded their offerings by acquiring Oneforty, a Twitter app store, and introducing personalized website software. Initially targeting small businesses, HubSpot later served larger companies up to 1000 employees. In 2014, they filed for an IPO and raised over $140 million. HubSpot's stock has performed well, reaching a peak of $841.26 in 2021. They made strategic acquisitions, including Kemvi in 2017 and The Hustle, a content and email newsletter company, in 2021. Yamini Rangan became the CEO in September 2021, while Brian Halligan transitioned to Executive Chairman.

HubSpot emphasizes the importance of security, privacy, and control in its products. It offers a comprehensive approach to data security, privacy, and control, providing tools that empower teams to achieve compliance and a secure infrastructure to protect data. HubSpot is trusted by over 121,000 customers in more than 120 countries, including notable organizations such as KPMG, WWF, GoFundMe, Cybereason, LegalZoom, and CancerIQ. The company takes a proactive approach to privacy and security, ensuring that its products meet established standards. HubSpot follows a defense-in-depth approach, implementing multiple layers of security throughout the organization. It complies with industry best practices, such as the OWASP Top 10 and the CIS Critical Security Controls, to continuously improve its security program. HubSpot prioritizes data privacy, ensuring that customer data is protected and used only as permitted in its Customer Terms of Service and Privacy Policy. It offers features like GDPR compliance tools, customizable consent tracking, and subscription settings to help customers comply with data privacy regulations. HubSpot's CRM platform is built on secure software development processes and includes features like SSL certificates, single sign-on, two-factor authentication, and password protection for enhanced security. Customers can access resources like GDPR compliance information, privacy policy details, legal documentation, and security reports through HubSpot's Trust Center. The company also addresses frequently asked questions about its infrastructure, regional data hosting, certifications, encryption, and other security measures. Overall, HubSpot provides software that is secure, reliable, and designed to scale with businesses.

HubSpot's CMO predicts that AI will revolutionize business in the future. HubSpot supports its users with free courses, certifications, resources, and a dedicated customer support team. It also has a thriving user community, user groups, blogs, and an app marketplace with numerous integrations.

The Reality

Some employees of HubSpot have access to HubSpot accounts. This access is intended to be used to assist customers. Users should be aware that it often includes the past behavioural history of individual users. Such information is highly valuable in creating an effective social engineering attack. While security reviews happen, mistakes can be made.

“While it is true that financial data is not stored in the CRM, you should be aware that data associated with the users of these companies and their behaviors is logged in the CRM. This puts users in a unique position to be targeted in social engineering attacks.” - HubSpot super admin Robert Warren

[Vendors like HubSpot who are] trusted with client information [are] subjected to a number of reviews.

However, even in those cases, vendors can make mistakes and as evidenced by Friday’s events have incidents that impact us and our clients,

- Adam Healy, chief security officer at BlockFi

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 - Circle HubSpot Data Breach

Date	Event	Description
March 15th, 2022	Social Engineering Attack	On March 15th, at an unspecified time, a HubSpot employee fell victim to a social engineering attack which persuaded the employee to provide the necessary credentials and multi-factor authentication.
March 17th, 2022	Client Data Exported	It is reported by Hubspot that contact data and user data was exported on March 17th and March 18th through an internal support tool called "just-in-time access" (or JITA).
March 18th, 2023 7:00:00 AM MDT	Hubspot Realized Breach	HubSpot reports they first "became aware of this unauthorized activity. [They] took prompt action to shut down the bad actor’s access and investigate its impact."
March 19th, 2022	Hubspot Issues Press Release FAQ	According to HubSpot's website, they published the statement and FAQ on March 19th. (No time is provided and the page was not captured by archive until the following day.) The state that "[o]n March 18, a bad actor compromised a HubSpot employee account and used it to access data within fewer than 30 HubSpot accounts." Hubspot also set up a public FAQ page on their website to provide more information. They report the breach exporting contact data from fewer than 30 HubSpot portals, all of which have been notified. HubSpot believes the incident to be targeted at customers in the cryptocurrency industry and has taken measures to terminate access for the compromised employee account and prevent other employees from taking certain actions in customer accounts. Customers who have been impacted by the breach should contact their respective companies for information about what data was shared and any necessary steps they need to take.
March 21st, 2022 8:16:00 AM MDT	CrowdFundInsider Reports on Breach	According to an email distributed by Circle, HubSpot has “confirmed that an unauthorized bad actor accessed certain client data from several companies, including Circle, housed on their platform after a HubSpot employee account was compromised.” Circle notes that their internal systems were not impacted and personal information like a social security number or government ID information was not accessed. Circle adds that KYC and financial information were not stolen either.
March 21st, 2022 8:17:00 AM MDT	CoinDesk Article Published	CoinDesk publishes an article on the incident. They report that a data breach at third-party marketing vendor HubSpot has impacted BlockFi, Swan Bitcoin, NYDIG, and Circle, among others, who maintain their customers' funds are still safe and secure. While user information was leaked to hackers, the affected companies said passwords and other internal information were not affected. HubSpot has not disclosed the full extent of the breach, and an investigation is ongoing. This is copied to Yahoo Finance.
March 21st, 2022 10:53:00 AM MDT	Cory Klippsten Criticism	Swan Bitcoin CEO Cory Klippsten criticizes the industry since close to 30 companies appear to have been breached and fewer than 10 have disclosed it publicly. He announces that his company is severing relations.
March 21st, 2022 11:38:00 AM MDT	Benzinga Article Published	Benzinga publishes an article on the Circle data breach. "The hacked data concerns aspects of browsing activity and interest in the company's products and account manager's name (only when applicable) — but only of those users who opted in to receiving marketing communications from the stablecoin operator." The company wrote: "Phishing may be done using email, phone calls, voicemail or text messages. In each case, the goal is to lure you into revealing confidential information such as bank account numbers, credit card information, Social Security numbers or passwords."
March 21st, 2022 11:57:00 AM MDT	Blockworks Article Published	Blockworks publishes an article on the situation. They reported multiple crypto companies were affected including NYDIG, Pantera Capital, BlockFi, Circle and Swan Bitcoin. They report that Pantera Capital was breached a month earlier, and reference a Tweet from a breach a year and a month ago. The data breach saw user information leaked to hackers, but not passwords or sensitive personal information. It is believed to have been a “targeted incident focused on customers in the cryptocurrency industry”. Affected companies maintain customer funds are still safe and secure, and are monitoring the situation closely. The full extent of the HubSpot hack is still unknown and the investigation is reportedly still ongoing.
March 22nd, 2022 3:10:55 AM MDT	Silicon Republic Article	Silicon Republic reports that cryptocurrency companies, including Swan Bitcoin, BlockFi, NYDIG, Pantera Capital, and Circle, were among the 30 affected by a data breach at marketing and sales platform HubSpot. The company confirmed that a “bad actor” compromised an employee account and exported contact data from a small number of customer accounts. While it is unclear what the attacker planned to do with the information, phishing emails have been reported attempting to trick users into submitting their passwords into a fake company website.
March 24th, 2022 11:11:00 AM MDT	ThreatPost Article Published	ThreatPost publishes an article on the situation. They report that HubSpot, a marketing platform used by over 135,000 customers, suffered a data breach due to a rogue employee who targeted the company's cryptocurrency customers. At least 30 crypto firms were affected, including BlockFi, Swan Bitcoin, Circle, and NYDIG. The stolen data included contact data, names, emails, account types, phone numbers, and in some cases, company names. While there was no loss of sensitive financial or personal data, such as Social Security numbers or tax IDs, there was the inclusion of a "limited historical snapshot of USD deposits" and about 1.2% of the dataset included clients' intended investment areas or the median net worth of their approximate geographic locales.

Technical Details

"On March 15, a bad actor conducted a social engineering attack against a HubSpot employee that captured the employee’s credentials and persuaded the employee to provide the necessary multi-factor authentication. Between March 15 and March 17, the bad actor conducted reconnaissance within HubSpot’s internal systems. On March 17 and March 18, the bad actor exported contact data and user data from certain HubSpot customer accounts via an internal support tool called just-in-time-access (or JITA)."

"HubSpot said on Saturday (19 March) that it became aware of a compromised employee account the previous day. The company believes data was exported from around 30 of its clients, “all of whom have been notified”."

Total Amount Lost

The total amount lost is unknown.

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?

"The breach has rippled through the crypto industry: As of Monday, crypto lending platform BlockFi, bitcoin-purchasing automation platform Swan Bitcoin, bitcoin company NYDIG, peer-to-peer payments technology company Circle and cryptocurrency fund Pantera Capital (which was hit a month prior) had been affected."

"Adam Healy, chief security officer at BlockFi, said that vendors like HubSpot who are “trusted with client information” are “subjected to a number of reviews.”"

"“However, even in those cases, vendors can make mistakes and as evidenced by Friday’s events have incidents that impact us and our clients,” Healy said in a statement sent to Blockworks."

Circle Email To Affected Users

Circle distributed an email to customers. TBD need to find full email.

confirmed that an unauthorized bad actor accessed certain client data from several companies, including Circle, housed on their platform after a HubSpot employee account was compromised. We are notifying you so that you can take actions to protect yourself. We encourage you to monitor your accounts on a regular basis, use strong passwords and remain vigilant against phishing attempts and other suspicious activity. Phishing may be done using email, phone calls, voicemail, or text messages. In each case, the goal is to lure you into revealing confidential information such as bank account numbers, credit card information, Social Security numbers or passwords.

"Circle, the financial services firm that issued the dollar-linked stablecoin, said in a statement to Blockworks that financial transaction data was not “impacted by the security incident.”"

"Circle declared in a recent statement that the breach of a HubSpot employee account resulted in bad actors obtaining the contact information. The hacked data concerns aspects of browsing activity and interest in the company's products and account manager's name (only when applicable) — but only of those users who opted in to receiving marketing communications from the stablecoin operator."

"According to an email distributed by Circle, HubSpot has “confirmed that an unauthorized bad actor accessed certain client data from several companies, including Circle, housed on their platform after a HubSpot employee account was compromised.”"

"“We have communicated with the affected parties and will follow up with them on any material developments as we continue to monitor and investigate the incident,” a Circle spokesperson told Blockworks."

Ultimate Outcome

Employee Responsible For Breach Fired

The hacker compromised a HubSpot employee account and focused on stealing data from cryptocurrency industry customers. The "rogue" HubSpot employee was fired over the breach that targeted the company's cryptocurrency customers.

"The investigation of the bad actor’s activity confirmed that this was a targeted attack focused on customers in the cryptocurrency industry. There was no evidence of suspicious activity within targeted customer accounts after March 18, 2022."

"While it is unclear what the attacker planned to do with this information, Coindesk reported that some users saw an uptick in phishing emails over the weekend, attempting to lure them into putting their passwords into a fake company website."

"Circle tells prospective users: “We are notifying you so that you can take actions to protect yourself. We encourage you to monitor your accounts on a regular basis, use strong passwords and remain vigilant against phishing attempts and other suspicious activity. Phishing may be done using email, phone calls, voicemail, or text messages. In each case, the goal is to lure you into revealing confidential information such as bank account numbers, credit card information, Social Security numbers or passwords.”"

"A full list of the affected clients has not been published, but [HubSpot] said it appeared to be a “targeted incident focused on customers in the cryptocurrency industry”."

"Since the incident, we have taken steps to enhance our security and to prevent a similar attack from occurring in the future. While our investigation has concluded and remediation completed, we remain committed to improving our security through regular assessments and testing."

"Hubspot says it's around 30 crypto companies in the hack. Fewer than 10 have divulged so far."

Hubspot reported upgrading security on their FAQ:

Since the incident, we have taken steps to enhance our security and to prevent a similar attack from occurring in the future. While our investigation has concluded and remediation completed, we remain committed to improving our security through regular assessments and testing.

Total Amount Recovered

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

Ongoing Developments

HubSpot has provided limited details into their upgraded security model, and there are presently suspected to be dozens of other crypto companies who were also using HubSpot and did not publicly disclose this information breach.

Ongoing Phishing Attack Risk

Although no sensitive financial or personal data was included, security specialists have raised concerns about the potential for social engineering attacks using the exfiltrated information.

Upgrades To HubSpot Security Model

Hubspot reportedly has "taken steps" to "enhance" their security which they believe will "prevent a similar attack from occurring in the future". They "remain committed to improving [their] security through regular assessments and testing".

Since the incident, we have taken steps to enhance our security and to prevent a similar attack from occurring in the future. While our investigation has concluded and remediation completed, we remain committed to improving our security through regular assessments and testing.

With limited tangible details provided publicly, it remains to be seen how effective these new security measures will be at preventing future breaches.

Many Companies Not Disclosing Breach

According to Swan Bitcoin CEO Cory Klippsten reported that HubSpot had indicated "around 30 crypto companies [were affected by] the hack". The only companies which appear to have reported the breach so far are Swan Bitcoin, BlockFi, NYDIG, and Circle. (Pantera Capital suffered a separate HubSpot breach a year prior, and was not part of this incident.)

If this is true, it could indicate around 26 companies who had customer data breached and did not report the issue. Users of other cryptocurrency services should be on guard that their data may have been breached in the HubSpot incident.

Individual Prevention Policies

Most companies have insecurities. Any information provided to a company may be breached or abused.

Protection Of Personal Information

Obviously, anything you can do to minimize the amount of information which you provide to websites will reduce your risk.

Set up separate email addresses for each service, and avoid providing your phone number whenever possible. Any received emails or phone calls must be viewed with scrutiny, especially if unsolicited. Interact with companies only through their official websites and confirm anything with the company directly via multiple official sources, especially if it promises a significant incentive to take an action or threatens access to your funds if an action is not taken. It would be recommended to also establish a network of multiple trusted individuals who use the same services and have a strong level of security knowledge.

Never Give Access To Your Funds

In a typical cryptocurrency fraud, malicious actors try to use the available information to convince you to give them authorization to access or transfer funds. This can be accomplished via tricking you into providing a private key or seed phrase, signing a transaction that grants them permission to move funds, or installing malware on your device. In most cases, this will be accomplished via a greed or fear trigger, and you should be on extra guard when experiencing those emotions.

Private keys can be obtained through seed phrases, mnemonics, private key files, mobile synchronization screens, wallet export features, wallet backups, etc... Never ever send these to anyone else who you do not intend to allow to take all of your money. Attackers will use a wide variety of tactics to convince you like pretending to be your wallet software, pretending they work for the wallet software, or asking you to screen share. Don't fall for them.

Any time untrusted software is being run is an opportunity for abuse. It is recommended to always interact with cryptocurrency in a fully controlled environment, which is an environment where you have understanding of every piece of software running there. Using a hardware wallet, spare computer with all software wiped, and/or virtual machine with only the needed software greatly reduces your attack surface. Take the time to verify downloaded files come from the correct and expected source and match available hashes if provided. Any time you encounter a new file, always check if it can contain executable code prior to using it.

Store the majority of funds offline. By offline, it means that the private key and/or seed phrase is exclusively held by you and not connected to any networked device. Examples of offline storage include paper wallets (seed phrase or key written down and deleted from all electronic media), hardware wallets, steel wallet devices, etc...

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

Platform Prevention Policies

Platforms should put in place multi-signature access control on all customer data, which requires the approval of multiple people to enable the download of data. An external security review should be conducted regularly. If information is lost in a breach, the level of damage can be minimized by educating users about potential scams and frauds that they may encounter. Platforms should be prepared to assist with victims, which could be done through an industry insurance fund.

Never take for granted the limited knowledge of users of your service and their tendency to skip past provided information. It is recommended to design a simple tutorial and quiz for new users which explains the basics of seed phrases, strong password generation, secure two-factor authentication, common fraud schemes, how ponzi schemes work, as well as other risks which are unique to the cryptocurrency space. This tutorial and quiz should ensure their understanding and be a standard part of the sign-up or download process which is difficult or impossible to skip.

All wallets, minting functions, and critical infrastructure should be implemented with a multi-signature requirement, with a recommended minimum of 3 signatures required. This means that making important changes or approving spending will require the keys held by at least 3 separate individuals within the organization to approve. The multi-signature should be implemented at the lowest layer possible, all key holders should have security training, and all key holders should be empowered and encouraged to exercise diligence.

All aspects of any platform should undergo a regular validation/inspection by experts. This validation should include a security audit of any smart contracts, reporting any risks to the backing (of any customer assets, ensuring treasuries or minting functions are properly secured under the control of a multi-signature wallet, and finding any inadequacies in the level of training or integrity of the team. The recommended interval is twice prior to launch or significant system upgrade, once after 3 months, and every 6 months thereafter. It is recommended that the third party performing the inspection not be repeated within a 14 month period.

All points along the communication and supply chain should be inspected for vulnerabilities. Common vulnerability points may include DNS, Discord, and customer information. What steps are required to access and/or modify the component? Do any third party companies or organizations implement a proper multi-signature approach? What additional security options are available?

Work with other industry platforms to set up a multi-signature wallet with private keys held separately by delegate signatories from seven prominent platforms and services within the industry. Establish requirements for contributions by all platforms and services, designed to be affordable for small platforms yet large enough to cover anticipated breach events. Any breach event can be brought forth by a member platform or a petition of 100 signatures for consideration by the delegate signatories. A vote of 4 or more delegate signatures is required to release any funds, which could partially or fully restore lost funds based on their assessment.

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

Regulatory Prevention Policies

While the best solution is to reduce the amount of information collected, a combination of increased education, improved security, and a collective industry insurance fund can also prevent and mitigate the outcome of a similar data breach.

Private Identity Key Protocol

A key challenge is the increased reliance on an incredible amount of personal data by financial firms. Having this information shared as part of a normal business relationship and floating around on multiple platforms poses a severe risk to all users when it comes to identity theft, phishing attacks, and other targeted criminal activities. While various frameworks have been proposed for how platforms can safeguard this information, they all suffer from the problem of depending on individuals within the organization who can be coerced, bribed, or tricked into violating the policies. They also do not address situations in which customers divulge information to unregulated platforms, either deliberately or by being tricked via a phishing attack. Criminals only need to breach one platform, and the information is permanently exposed to the black market. As an alternative, a single digital access token could be used to validate identity, with the associated personal information stored in a single secure location. The personal information is much less likely to be breached. If the token is breached on any third party platform, the access token can be revoked and swapped with a new token, while criminals have no way of utilizing the old token.

Increased Education For Cryptocurrency Users

Create a standard tutorial and quiz for all new cryptocurrency participants, which is required to be completed once per participant. This tutorial and quiz should cover the basics of proper seed phrase protection, strong password generation, secure two-factor authentication, common fraud schemes, how to detect and guard against phishing attacks, how ponzi schemes work, as well as other risks which are unique to the cryptocurrency space.

Third Party Security Assessments

All platforms should undergo published security and risk assessments by independent third parties. Two assessments are required at founding or major upgrade, one after 3 months, and one every 6 months thereafter. The third parties must not repeat within the past 14 months. A risk assessment needs to include what assets back customer deposits and the risk of default from any third parties being lent to. The security assessment must include ensuring a proper multi-signature wallet, and that all signatories are properly trained. Assessments must be performed on social media, databases, and DNS security.

Establish Industry Insurance Fund

Work with other industry platforms to set up a multi-signature wallet with private keys held separately by delegate signatories from seven prominent platforms and services within the industry. Establish requirements for contributions by all platforms and services, designed to be affordable for small platforms yet large enough to cover anticipated breach events. Any breach event can be brought forth by a member platform or a petition of 100 signatures for consideration by the delegate signatories. A vote of 4 or more delegate signatures is required to release any funds, which could partially or fully restore lost funds based on their assessment.

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