Linode blamed for Bitcoin theft

Linode feature so often on this blog that they have their own tag. OK, they're not the worst hosting company in terms of malicious sites on their network, but at the moment they come up regularly.

Now, sometimes a web host is purely black hat - they know exactly what their customers are up to and they don't care. Sometimes a legitimate web host gets duped into renting servers out to the bad guys, but usually they react eventually. Then there's a third possibility - the the servers have been hacked and are running malicious sites without the host's knowledge.

The thing is that over recent weeks, it seems that many servers hosting malware for those BBB / NACHA / IRS / etc emails that many people have been bombarded with look like legitimate servers that have been taken over. Of course, no web host wants to admit that they have insecure management systems, but then sometimes everything comes out in the open.

It turns out that deficiencies in Linode's security has led to the apparent theft of hundreds of thousands of bitcoins (an online currency). As detailed, the attack shows that the attacker appeared to mount the attack with very little trouble, leaving very little evidence behind them except that the bitcoins were missing.

Linode itself acknowledges the problem:

Manager Security Incident

Ensuring the security of our platform is our top priority. We maintain a strong security policy and aim to communicate openly should it ever be compromised. Thus, we are posting to describe a recent incident affecting the Linode Manager.

Here are the facts:

This morning, an intruder accessed a web-based Linode customer service portal. Suspicious events prompted an immediate investigation and the compromised credentials used by this intruder were then restricted.  All activity via the web portal is logged, and an exhaustive audit has provided the following:

All activity by the intruder was limited to a total of eight customers, all of which had references to "bitcoin".  The intruder proceeded to compromise those Linode Manager accounts, with the apparent goal of finding and transferring any bitcoins.  Those customers affected have been notified.  If you have not received a notification then your account is unaffected.  Again, only eight accounts were affected.

The portal does not have access to credit card information or Linode Manager user passwords.  Only those eight accounts were viewed or manipulated -- no other accounts were viewed or accessed.

Security is our number one priority and has been for over eight years. We depend on and value the trust our customers have placed in us. Now, more than ever, we remain committed to ensuring the safety and security of our customers' accounts, and will be reviewing our policies and procedures to prevent this from ever recurring.

The thing is, this server compromise was immediately obvious because of the loss of bitcoins. But where servers are being used for the Blackhole Exploit Kit or other malware, it's a lot more subtle. I suspect that this isn't the first time recently that Linode has been compromised like this.. and it's probably not the only host with the problem. In recent months, the bad guys have moved their exploit servers from Eastern European cesspits to well-known hosts, many of which are based in the US. Is this all part of the same thing?