The troubling ripple effect of the Ashley Madison data dump

The massive Ashley Madison data spill that revealed users' credentials may be embarrassing to members of the infidelity site – as well as elicit a healthy doses of schadenfreude across the Web. But it also raises new and serious security concerns for the US military, government agencies, and major corporations. 

When a hacker group calling itself The Impact Crew released data stolen from Ashley Madison’s parent company, Avid Life Media, it revealed some 28 million unique e-mail addresses, including some 13,000 with .mil and .gov suffixes, said Robert Hansen, a vice president at the cybersecurity firm WhiteHat Security. 

The trove included information that can be tied to "a handful of congressmen" and executives from Fortune 500 companies, said Mr. Hansen, who has analyzed the leaked information. (Passcode has viewed the leaked data, but has not independently verified Hansen’s numbers.) "You have financial institutions, venture financiers, healthcare companies," he said.

Now, Hansen and other security experts worry that information could be used to break into other accounts, further spreading the pain for millions of individuals from what is already an excruciating security breach.

Among the troubling data released in the Ashley Madison breach are security challenge questions and their responses for registered users of the site. That information can give criminal hackers powerful ammunition to carry out follow-on attacks. For example, with an e-mail address and a user’s secret question and answer pairs, even an unsophisticated hacker could compromise work, banking, or e-commerce accounts linked to an e-mail address, said Hansen.

Security questions are particularly damaging, because users typically reuse the same questions and answers across different online properties. "This is just a great example of how personal data becomes a liability for companies unless they can guarantee safeguards," Hansen said. 

Many of the names and e-mail addresses revealed in the dump appear to be false. But the data leak was massive enough that millions of individuals will find themselves exposed by information that is hard to explain away: credit card transaction data that identifies Ashley Madison customers by name and address, geolocation data captured from their computer or mobile phone, as well as security questions used to recover lost passwords that are likely to be specific to the individual user. 

"This information can be used to not only steal additional information and ultimately the person's identity, but also embarrass or hold individuals at ransom, especially given that many users would want to keep this information secret from colleagues or spouses," said Eric Chiu, president of HyTrust in an e-mail statement following the breach.

The data was taken in an aggressive hack of Avid Life Media (ALM) in July. In a statement released with the data over the weekend, The Impact Crew said that it released the data because Avid Life Media failed to respond to demands that it take down Ashley Madison and a related site, Established Men. 

“We have explained the fraud, deceit, and stupidity of ALM and their members,” the group wrote. “Now everyone gets to see their data.”

The sheer breadth of the data leaks suggests that The Impact Team had access to ALM’s network for a long time and has raised speculation that a current or former employee was the source of the breach.

Security experts at the firm TrustedSec note that the data dump includes reams of information about ALM’s internal operations, including employee and administrator credentials to critical systems, contract documents, organization charts, and other internal documents.

One of the few things ALM did right was to use a robust encryption algorithm, Bcrypt, to secure its customers’ passwords.

Robert Graham of the firm Errata Security said that will make it difficult for casual attacks on strong passwords, though weak – or common – passwords will be easy prey for many hackers. If there's any consolation at all regarding this attack, wrote Mr. Graham in a blog post, is that it could have been far worse. 

"Compared to other large breaches, it appears Ashley Madison did a better job at cybersecurity," Graham wrote. "They stored e-mail addresses and passwords in separate tables, to make grabbing them (slightly) harder. Thus, this hasn't become a massive breach of passwords and credit-card numbers that other large breaches have lead to. They deserve praise for this."