Yahoo uncovered breach after probing a black market sale

A hacker’s attempt to sell user data he claimed was stolen from Yahoo actually led the company to uncover a far more severe breach.

Yahoo confirmed Thursday a data breach, which affects at least 500 million users, but it could be unrelated to the black market sale of alleged Yahoo accounts, according to a source familiar with the matter.

The information comes even as security experts have been questioning why Yahoo took so long to warn the public when it was known that a hacker was claiming to be selling the data online around early August.

The hacker, named peace_of_mind, was found selling the alleged Yahoo login credentials to over 200 million accounts on a black market website that offers illegal goods. The hacker provided a sample of the data that appeared to be real. However, Yahoo investigated the sale and found no evidence that it was legitimate, the source said.

Following the investigation, a broader probe was launched to review Yahoo’s systems, uncovering evidence that the company had actually been hacked in late 2014. 

Vitali Kremez, a cybercrime analyst at security firm Flashpoint, also said that the two incidents probably weren’t connected. What the hacker peace_of_mind was selling was different from the Yahoo breach. For one, the data he put up for sale allegedly came from 2012, not 2014.

Peace_of_mind also only advertised that he stole logins to over 200 million accounts, far less than the 500 million number, Kremez added.

Thursday’s breach might also be politically motivated. Yahoo is blaming the breach on an unnamed “state-sponsored actor.” Although it’s still unclear how the hack was pulled off, the stolen data includes names, email addresses, telephone numbers and hashed passwords.

Peace_of_mind was contacted over instant messenger on Thursday and the hacker appeared to deny that his sale was bogus.

“I can say is the 200 million database wasn’t the entire database,” he said, declining to elaborate. He also denied that a state-sponsored hacker was involved.

Chatter about the sale of a stolen Yahoo database has been circulating over the black market for some time, said Alex Holden, Chief Information Security Officer of security firm Hold Security.

Hackers have been claiming that the database contains between 200 million to over 500 million accounts. Holden’s company has even pretended to be a potential buyer in order to learn more about it.

But despite the 19 bitcoin price tag (about US$11,000) the hackers kept offering excuses to stall the purchase. It was as if they were reluctant to hand it over, he said.

“It was unclear if this was really being sold, or what happened to it,” Holden added. However, the hackers have been giving different dates for when the data was stolen, claiming 2012 to 2015 and even this year.