“Some time around August 2013, hackers penetrated the email system of Yahoo, one of the world’s largest and oldest providers of free email services. The attackers quietly scooped up the records of more than 1 billion users, including names, birth dates, phone numbers and passwords that were encrypted with an easily broken form of security.
The intruders also obtained the security questions and backup email addresses used to reset lost passwords — valuable information for someone trying to break into other accounts owned by the same user, and particularly useful to a hacker seeking to break into government computers around the world: Several million of the backup addresses belonged to military and civilian government employees from dozens of nations, including more than 150,000 Americans.
No one knows what happened to the data during the next three years. But last August, a geographically dispersed hacking collective based in Eastern Europe quietly began offering the whole database for sale, according to Andrew Komarov, chief intelligence officer at InfoArmor, an Arizona cybersecurity firm, who monitors the dark corners of the internet inhabited by criminals, spies and spammers. Three buyers — two known spammers and an entity that appeared more interested in espionage — paid about $300,000 each for a complete copy of the database, he said.
The attack, which Yahoo disclosed on Wednesday, is the largest known data breach of a company. And neither Yahoo nor the public had any idea it had occurred until a month ago, when law enforcement authorities came to the company with samples of the hacked data from an undisclosed source.
Yahoo still does not know who broke into its systems in 2013, how they got in or what they did with the data, the company said Wednesday. It has made more progress tracking down a separate hacking episode in 2014, which compromised 500 million email accounts and was disclosed in September. The company has said it believes the 2014 attack was sponsored by a government entity but has not identified it.
The Federal Bureau of Investigation said in a statement that it was investigating the Yahoo breach. Attorney General Eric T. Schneiderman of New York also said his office was in touch with Yahoo to examine the circumstances of the data breach.
Security experts and former government officials warned that the real danger of the Yahoo attack was not that hackers gained access to Yahoo users’ email accounts, but that they obtained the credentials to hunt down more lucrative information about their targets wherever it resided across the web.
“This wasn’t an attack against Yahoo, but rather reconnaissance to launch other campaigns,” said Oren Falkowitz, a former analyst at the National Security Agency who now runs Area 1, a Silicon Valley security start-up.
“Inactive or not, a billion user accounts and hashes means attackers have a golden key for new phishing attacks,” he said. In a phishing attack, a hacker often poses as a trusted contact and tries to induce the recipient of an email to click on a malicious link or share sensitive information.
Users routinely ignore advice to use different passwords for their different accounts across the web, which means a stolen Yahoo user name and password could open the door to more sensitive information in online-banking, corporate or government email accounts.
Mr. Komarov said the group that hacked Yahoo in 2013, which he calls Group E, appeared to be motivated by money, not politics. It is believed to have broken into the systems of major American internet companies like LinkedIn, Myspace, Dropbox and Tumblr, as well as foreign-owned services like VKontakte, a Russian social network similar to Facebook.
Group E sometimes sells complete copies of the data, Mr. Komarov said. It also combines information from different hacking forays into a master database. Like a corporate marketer, it peddles chunks of the data to spammers seeking to reach specific audiences, like middle-aged women who live in certain ZIP codes. It sometimes operates through intermediaries.
That database of 1 billion Yahoo accounts, Mr. Komarov said, is still for sale, although current bids are coming in at $20,000 to $50,000 since the data is much less valuable now that Yahoo has changed the passwords.”