Yahoo Confirms Data Breach: Over 500M User Credentials Compromised In Hack

Yahoo confirmed a data breach Thursday that has compromised more than 500 million user accounts. The internet company said a wide array of user information was taken from its network in 2014 by a "state-sponsored actor," but it does not include unprotected passwords, payment card data or bank account information. Should the company's estimates be accurate, then the hack would be the largest breach ever.

Yahoo is currently working with law enforcement to investigate the matter, The Wall Street Journal reported. The company said it will be notifying users who may have been affected.

"Yahoo is notifying potentially affected users and has taken steps to secure their accounts," the company said on its investor relations page. "These steps include invalidating unencrypted security questions and answers so that they cannot be used to access an account and asking potentially affected users to change their passwords. Yahoo is also recommending that users who haven't changed their passwords since 2014 do so."

News of the data breach first made headlines in August after a notorious cybercriminal, known as “Peace,” alleged he had 200 million credentials of Yahoo users from 2012. The asking rate for the data — according to Yahoo, it includes names, email addresses, telephone numbers, dates of birth, hashed passwords and more — on the dark web was roughly $1,860. In the past, Peace has sold hacked data from Myspace and LinkedIn.

“We are aware of a claim,” a Yahoo spokesperson told Motherboard, who received a sample of 5,000 records from Peace, in an email at the time. “We are committed to protecting the security of our users’ information and we take any such claim very seriously. Our security team is working to determine the facts. Yahoo works hard to keep our users safe, and we always encourage our users to create strong passwords, or give up passwords altogether by using Yahoo Account Key, and use different passwords for different platforms.”

Recode, which first reported Thursday that Yahoo would be confirming the breach, noted the breach may have “larger implications” for Yahoo, which currently is in the middle of a $4.8 billion sale of its core business to Verizon. But B. Riley & Co. analyst Sameet Sinha told the Journal the breach will likely not affect the deal as “data breaches have become part of doing business now.”

Yahoo's full statement is, as follows:

A recent investigation by Yahoo! Inc. has confirmed that a copy of certain user account information was stolen from the company's network in late 2014 by what it believes is a state-sponsored actor. The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. The ongoing investigation suggests that stolen information did not include unprotected passwords, payment card data or bank account information; payment card data and bank account information are not stored in the system that the investigation has found to be affected. Based on the ongoing investigation, Yahoo believes that information associated with at least 500 million user accounts was stolen and the investigation has found no evidence that the state-sponsored actor is currently in Yahoo's network. Yahoo is working closely with law enforcement on this matter.

Yahoo is notifying potentially affected users and has taken steps to secure their accounts. These steps include invalidating unencrypted security questions and answers so that they cannot be used to access an account and asking potentially affected users to change their passwords. Yahoo is also recommending that users who haven't changed their passwords since 2014 do so.

Yahoo encourages users to review their online accounts for suspicious activity and to change their password and security questions and answers for any other accounts on which they use the same or similar information used for their Yahoo account. The company further recommends that users avoid clicking on links or downloading attachments from suspicious emails and that they be cautious of unsolicited communications that ask for personal information. Additionally, Yahoo asks users to consider using Yahoo Account Key, a simple authentication tool that eliminates the need to use a password altogether.

Online intrusions and thefts by state-sponsored actors have become increasingly common across the technology industry. Yahoo and other companies have launched programs to detect and notify users when a company strongly suspects that a state-sponsored actor has targeted an account. Since the inception of Yahoo's program in December 2015, independent of the recent investigation, approximately 10,000 users have received such a notice.

Additional information will be available on the Yahoo Security Issue FAQs page, beginning at 11:30 am Pacific Daylight Time (PDT) on Sept. 22, 2016.