Lastpass Crypto Nightmare Proves We've Been Wrong About Password...

Posted on Dec 25

• Originally published at harwoodlabs.xyz

The cybersecurity orthodoxy has a sacred cow: password managers are unquestionably good, and everyone should use one. We've preached this gospel for years, dismissing skeptics as Luddites who don't understand basic security hygiene. But the ongoing cryptocurrency thefts from the 2022 LastPass breach,still happening in late 2025, three years after the initial compromise,should force us to confront an uncomfortable truth: our credential security architecture is fundamentally broken, and password managers as currently implemented may be making some attack scenarios worse, not better.

TRM Labs' recent analysis reveals that Russian cybercriminals have stolen over $35 million in cryptocurrency from LastPass vault backups, with attacks continuing well into 2025. This isn't just another breach story. It's evidence that we've built a credential management system that creates honey pots for attackers and extends the blast radius of security incidents across years, not days.

The time has come to question whether centralized password management,as currently practiced,is actually the solution we thought it was.

The conventional wisdom goes like this: humans are terrible at passwords, so we need tools to generate and store strong, unique passwords for every account. Password managers encrypt everything with a master password, creating a secure vault that only you can access. Use a strong master password, enable two-factor authentication, and you're protected against the chaos of credential reuse and weak passwords.

This narrative has become so dominant that questioning it feels heretical. But the LastPass cryptocurrency thefts expose the dangerous assumptions baked into this model.

The 2022 LastPass breach gave attackers access to encrypted vault backups containing users' most sensitive credentials,cryptocurrency private keys, seed phrases, and other high-value secrets. The company warned that weak master passwords could be cracked through brute force, but the security community largely treated this as a theoretical concern. After all, users should have strong master passwords, right?

Three years later, we're seeing the brutal reality: attackers have been systematically cracking weak master passwords and draining cryptocurrency wallets. The blockchain evidence shows a methodical, multi-year campaign that has netted tens of millions of dollars. Russian exchanges like Cryptex and A

Source: Dev.to