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3Commas CEO Responds After Security Scare

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Alarm bells went off after users of crypto trading bot provider 3Commas reported unauthorized access, resulting in trade disruptions shortly after their account passwords had been reset. This prompted co-founder and CEO Yuriy Sorokin to address the incident in a bid to assuage user’s concerns. In an official blog post published recently, the top exec confirmed the breach and assured users that the platform’s services were functioning normally.

Upon detailed investigation, it was found that only a limited number of customer accounts were compromised, although 3Commas did not disclose the exact number of affected users. He emphasized the company’s commitment to maintaining a state of heightened alertness during this period. Looking into the hacked accounts, 3Commas revealed that most of the accounts with unauthorized trades had not enabled two-factor authentication [2FA].

In response to the few customer reports, we took immediate measures to address the situation. We shifted the approach to password resets and deployed an additional functionality so that, now, after passwords are reset, all API connections are disabled to provide an extra layer of security.

However, the accessed data did not include user API data or passwords. To ramp up security measures, the company has implemented a new method for password resets and disabled API connections after users reset their passwords. Additionally, 3Commas strongly recommends users enable 2FA and regularly change their passwords to enhance their account security.

3Commas API Keys Hack

This incident is reminiscent of the last December daring security breach where an anonymous Twitter user gained access to approximately 100,000 API keys belonging to 3Commas users and published them online. Initially attributing the breach to a phishing attack, 3Commas later admitted that the source was an API leak. Traders reported losses exceeding $20 million as the compromised API keys were misused to execute trades on exchanges like Binance, KuCoin, and Coinbase without their consent.

In response to these incidents, 3Commas has intensified its efforts to fortify its security protocols, ensuring the safety and confidence of its user base. As the investigation into the unauthorized trades continues, users are urged to heed the company’s recommendations and take proactive steps to protect their accounts in the evolving landscape of crypto security threats.

3Commas: API Keys Leak Lead To $22M Loss

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Users of the trading platform 3Commas got the biggest fright of their lives when an anonymous Twitter user illegally gained access to roughly 100,000 API keys and published them online. 

3Commas at the beginning pin the blame on a phishing attack that triggered the user’s data leak but recently confessed that the source was an API leak.

The revelation was brought by a cohort of traders who disclosed over $20 million worth of crypto had been pilfered through compromised API keys.

These keys were then exploited to execute trades on exchanges such as Binance, KuCoin, and Coinbase without their consent.

From maintaining that it had no security issues, co-founder Yuriy Sorokin ultimately acknowledged them when he tweeted,

“We saw the hacker’s message and can confirm that the data in the files is true… We are sorry that this has gotten so far and will continue to be transparent in our communications around the situation.”

For the uninitiated, users can connect their various cryptocurrency exchange accounts, including those held on Binance, to automated trading tools using the 3Commas platform.

Application programming interfaces [APIs] are standardized procedures that let various software components connect with one another and carry out activities.

The idea is that people don’t have to put in the effort to think about their professions. Instead, everything is instantaneous and automatic thanks to programming.

In his tweet, 3Commas’ Sorokin noted that he and his firm “did everything that we could to investigate an inside job, as it was always a possible scenario and on our watch list, but proof of an inside job was not found.”

Before 3Commas published its announcement, Binance CEO Changpeng Zhao warned customers on Wednesday afternoon that they should “immediately disable any API keys you may have previously entered into 3Commas [from any exchange].”

3Commas’s Admission After Binance’s CZ Warning

Following an incident on December 9 in which Binance terminated the account of a user who had complained about losing money the day before, CZ made the admission.

A leaked API key associated with 3Commas, according to that user, was used “to make trades on low cap coins to push up the price to make a profit.” Binance declined to pay the user back.

According to a tweet from CZ, the loss cannot be verified, and if the business compensated for it, “we will just be paying for users to lose their API credentials.”

3Commas Pushes Away Rumors of Stolen API Key by Employees

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The cryptocurrency trading company 3Commas has denied that its employees stole users’ API keys, claiming that screenshots making the rounds on social media is fake, and has urged those affected to contact the police to prevent the thieves from stealing their money.

A fake screenshot of a Cloudflare log is making the rounds on Twitter and YouTube, according to 3Commas co-founder and CEO Yuriy Sorokin, who wrote about it in a blog post on December 11. He claimed that this is done “in an effort to convince people that there was a vulnerability within 3Commas and that we were irresponsible enough to allow open access to user data and log files.”

The allegedly taken screenshots are meant to demonstrate how the 3Commas dashboard on Cloudflare exposed customers’ API keys.

3Commas asks users to file a police report

On December 10, Sorokin urged affected users to file a police report to have their exchange accounts frozen. This was stated in another blog post.

“The quicker this is done, the faster exchanges can freeze the perpetrators’ accounts to prevent money from being withdrawn and raise the possibility that some, or all, of the money, may be returned to victims,” the statement reads.

Users are required to provide identity information in order to trade or withdraw money because the majority of cryptocurrency exchanges adhere to Know Your Customer standards. Exchanges would be able to provide investigators with information about affected users’ police reports, the company said.

According to 3Commas, phishing attack evidence has been identified as a “contributory factor” in thefts. The company claims that malicious actors began phishing attacks in October and experimented with various methods. Sorokin said:

“Also, we have hard evidence that phishing was at least in some part a contributory factor; we published a blog article here showing many fake 3Commas websites that were created and some are still live on the internet, despite our best efforts to have them taken down.”

Overall, Sorokin concluded in the blog that the fake images were the result of considerable effort on the part of the bad actors. An unprecedented information attack has occurred. However, it would be absurd to take seriously any “security reports” that rely on this kind of “proof”.