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One password allowed hackers to disrupt Colonial Pipeline, CEO tells senators

CommoditiesJun 08, 2021 08:12PM ET
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© Reuters. Joseph Blount, JR., President and Chief Executive Officer, Colonial Pipeline is sworn in as he attends a hearing to examine threats to critical infrastructure, focusing on examining the Colonial Pipeline cyber attack at the U.S. Capitol in Washington, U.S

By Stephanie Kelly and Jessica Resnick-Ault

NEW YORK (Reuters) - The head of Colonial Pipeline told U.S. senators on Tuesday that hackers who launched last month's cyber attack against the company and disrupted fuel supplies to the U.S. Southeast were able to get into the system by stealing a single password.

Colonial Pipeline Chief Executive Joseph Blount told a U.S. Senate committee that the attack occurred using a legacy Virtual Private Network (VPN) system that did not have multifactor authentication in place. That means it could be accessed through a password without a second step such as a text message, a common security safeguard in more recent software.

"In the case of this particular legacy VPN, it only had single-factor authentication," Blount said. "It was a complicated password, I want to be clear on that. It was not a Colonial123-type password."

The panel was convened to examine threats to critical U.S. infrastructure and the Colonial attack, which shut key conduits delivering fuel from Gulf Coast refineries to major East Coast markets. Cyberattacks also hit U.S. meatpacking plants owned by JBS, showing the breadth of infrastructure facing cyber threats.

The Colonial Pipeline hack demonstrated that much of the company's infrastructure remains highly vulnerable and the government and companies must work harder to prevent future hacks, senators said during the hearing.

Security experts call the use of a single-factor login system a sign of poor cybersecurity "hygiene." They recommend two-factor authentication, which requires a secondary measure like a mobile text or hardware token, and most major companies require this across all internal applications.

Senators questioned Blount about the company's preparations and the timeline for responding to the ransomware attack, which shut the line for days and led to a spike in gasoline prices, panic buying and localized fuel shortages.

"I'm alarmed this breach ever occurred in the first place," said Senator Gary Peters, the committee's chairman. "Make no mistake: if we do not step up our cyber security readiness, the consequences will be severe."

The FBI attributed the hack to a gang called DarkSide. Some senators suggested Colonial had not sufficiently consulted with the U.S. government before paying the ransom against federal guidelines.

Blount said he made the decision to pay ransom and to keep the payment as confidential as possible because of concern for security.

"It was our understanding that the decision was solely ours to make about whether to pay the ransom," he said.

Blount said Colonial did not have a plan in place to prevent a ransomware attack, but did have an emergency response plan. The company notified the FBI within hours.

Blount said Colonial has invested over $200 million over the last five years in its IT systems. When pressed to answer how much Colonial has spent to keep its pipeline cyber secure, Blount repeated that amount. A company spokesperson later clarified the $200 million was for IT overall, which includes cyber security.

On Friday, U.S. Deputy Attorney General Lisa Monaco urged companies to tell federal authorities whether they paid ransom to cyberattackers, information that can help investigators.

Blount said even after getting the key from the hackers, the company is still recovering from the attack and is bringing back seven finance systems that have been offline since May 7.

On Monday, the Justice Department said it had recovered some $2.3 million in cryptocurrency ransom paid by Colonial Pipeline.

Colonial Pipeline previously had said it paid the hackers nearly $5 million to regain access. The value of the cryptocurrency bitcoin has dropped to below $35,000 in recent weeks after hitting a high of $63,000 in April.

As a result, the government recovered about 60 of the 75 bitcoin paid, but the value has dropped, falling short of the total dollar amount Colonial paid.

Bitcoin seizures are rare, but authorities have stepped up their expertise in tracking the flow of digital money as ransomware has become a growing national security threat and put a further strain on relations between the United States and Russia, where many of the gangs are based.

One password allowed hackers to disrupt Colonial Pipeline, CEO tells senators
 

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Comments (11)
Rick Baier
Rick Baier Jun 08, 2021 9:39PM ET
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Something about this stinks like rotting Denmark Cheese.
Eudon Hickey
Eudon Hickey Jun 08, 2021 8:21PM ET
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This is an inside job
lewis stevens
lewis stevens Jun 08, 2021 3:02PM ET
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And it is funny that we live in a world that the media puts on a bigger performance over this than about the election irregularities...but I guess makes sense considering that the US media does nothing any more than just regurgitate DNC press releases. It is more difficult to question election officials in Arizona about irregularities in the voting machines that to question a guy about a system where hackers guessed a password. And the most irregular part is the FBI apparently magically gained access to the bitcoin wallet, that the hackers magically happened to leave all the bitcoin in for the past few weeks...clearly nothing that the US media should be investigating or asking about... totally legit....definitely no collusion with the US government. Anybody who knows anything about bitcoin knows that the FBI accessing a bitcoin wallet makes virtually no sense in comparison to hackers gaining access to the Colonia Pipeline system,
lewis stevens
lewis stevens Jun 08, 2021 2:59PM ET
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So people are more confused about how hackers guessed the password to the Colonia Pipeline but not how the FBI gained access to the hacker's bitcoin wallet, wallets that are supposedly impossible to crack, and the hackers just happened to leave almost all of the bitcoin in the single wallet? Something that makes no sense unless the hackers were working in coordination with the US government and/or the US government is lying...
julian ryan
julian ryan Jun 08, 2021 2:54PM ET
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So people are more confused about how hackers guessed the password to the Colonia Pipeline but not how the FBI gained access to the hacker's bitcoin wallet, wallets which are impossible to crack, and the hackers just happened to leave almost all of the bitcoin in the single wallet?
julian ryan
julian ryan Jun 08, 2021 2:53PM ET
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Funny that we live in a world that they put on a bigger performance over this than about the election. It is more difficult to question election officials in Arizona about irregularities in the voting machines that to question a guy about a system where hackers guessed a password. And the most irregular part is the FBI apparently magically gained access to the bitcoin wallet, that the hackers magically happened to leave all the bitcoin in for the past few weeks...clearly nothing that the US media should be investigating or asking about... totally legit....definitely no collusion with the US government. Anybody who knows anything about bitcoin knows that the FBI accessing a bitcoin wallet makes virtually no sense in comparison to hackers gaining access to the Colonia Pipeline system,
Ioannis Lazaridis
Ioannis Lazaridis Jun 08, 2021 1:46PM ET
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When the energy is Russia is easier to convince the public for any measures. Measures are good because protect us from Russians , simple. Good bye decentralization.
Wil PCH
Wil PCH Jun 08, 2021 1:46PM ET
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Did u know where they recovered the money & caught the hackers? Blame the whole world but not own country. Like a little child
Milo Hernandez
Milo Hernandez Jun 08, 2021 11:15AM ET
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another russian making comments about our President
Milo Hernandez
Milo Hernandez Jun 08, 2021 11:14AM ET
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another russian
Frederick Chotsky
Chotsky Jun 08, 2021 11:12AM ET
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or Badakathcare
dc Gpswill
dc Gpswill Jun 08, 2021 11:01AM ET
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darkside is Biden nick name
 
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