Pony botnet stole Bitcoins and Litecoins worth $220,000. Did anyone even notice?

The Pony botnet has infected hundreds of thousands of systems in a campaign that has netted cybercriminals at least $220,000 (APS133,000) worth of virtual currencies, mainly Bitcoins and Litecoins, security firm Trustwave has revealed.

Virtual currencies are an obvious target for criminals, but the scale of what Trustwave uncovered when it analysed one of the botnet’s command and controller servers should sound an alarm over their incredible vulnerability.

Given that Pony is designed to steal credentials, why wouldn’t criminals also try and steal digital wallets and their private keys if an infected system contains such a thing?

In a four month period between September and January 2013, the botnet pilfered more than 700,000 credentials, comprising website logins (600,000), emails accounts (100,000), FTP accounts (16,000), secure shell accounts (900), and remote desktop credentials (800).

From the compromised wallets, the botnet was able to get access to 355 Bitcoins, 280 Litecoins, 33 Primecoins, and 46 Feathercoins worth (as of February) $220,000, Trustwave said.

“For all the reasons described above we don’t really know what happened to these coins. We cannot call them stolen any more than we can confirm that the transfers were legitimate transactions,” said researchers.

And that’s the odd thing about virtual currencies. Given that there is no central authority managing them, defining what ‘stolen’ actually means in this context is tricky. The assumption must be that the owners of the systems infected by the botnet did not want the currency on them to be removed.

Most of the apparent victims were from Germany (28.5 percent), ahead of Poland (12 percent), Italy (11 percent), and the Czech Republic (11 percent).

What the attack suggests is that Internet users are happily mining currencies without the know-how to secure them or the awareness that they can be easily stolen.

As virtual currencies have boomed so have the malware campaigns determined to take advantage of that fact. In many ways, because such currencies exist in an entirely online form, they represent the perfect financial target for cybercriminals. Turning stolen coins into real money is also fast and untraceable.

Currency owners can check to see whether they are on the list of compromised accounts by entering their public key on Trustwave’s website.

Virtual currency crime – overwhelmingly targeting Bitcoins – is rapidly expanding and now includes everything from DDoS attacks on major exchanges to the disappearance of virtual banks where people believed they had securely stored their currency.

The world has been warned.