On December 22, 2022, LastPass announced that a data breach first disclosed in August 2022 was far more extensive than initially thought. The news sent shockwaves through the industry, leaving many password manager users — especially LastPass users — concerned about the security of their sensitive information.

The breach serves as a stark reminder that no online service provider may be completely bulletproof breach-wise. So today, let’s get into the LastPass data breach and what it means for NordPass users.

The LastPass data breach breakdown

Cybercriminal activity has been on a steady rise for the last decade, and it looks that the trend is not about to change. In fact, today, cybercrime is the most lucrative criminal activity and is estimated to cost the world $10.5 trillion annually by 2025.

So as our personal and financial information is increasingly getting stored online, it is critical that companies take all necessary steps to protect their customers’ data. Unfortunately, the recent LastPass data breach shows that even well-known companies can fall short security-wise.

The company’s latest statement explains that an unauthorized party was able to access LastPass’ cloud-based storage environment and copy customer vault data along with information from a backup of customer account information.

The extent of the breach is not yet clear, but it is likely that it included some personally identifiable data such as email addresses, phone numbers, and billing information for some users.

The response from LastPass to the breach has been met with criticism from both industry experts and customers. In fact, it has already led to a class-action lawsuit, with one plaintiff alleging that the data breach resulted in the theft of around $53,000 worth of Bitcoin.

Did the LastPass data breach affect all password manager users?

Let’s be clear — the LastPass data breach does not have any direct effect on NordPass, its users, or users data.

After all, we’re two different companies and products with completely different security approaches and mindsets. However, we admit that seeing a competitor affected by a breach of this magnitude is an acute reminder to stay vigilant and prepared at all times.

Is NordPass a secure place for your digital valuables?

Given the severity of the LastPass data breach, it’s only natural that people are questioning the security of their password manager, including NordPass.

First, one of the key elements of NordPass is that it is a zero-knowledge password manager equipped with an advanced encryption algorithm known as XChaCha20 to ensure protection of everything you store in NordPass.

This means that all data stored in the NordPass vault is first encrypted on your device and only then sent to the cloud-based server. Because of the way NordPass is set up, it is only you — the user — who holds the decryption key and has access to everything stored in their vault.

The NordPass team can’t see or access anything. The same principle applies in situations of breaches. Even if a bad actor were able to get their hands on your vault data, they would still need your device, which holds the decryption key, to access the actual contents of the vault data.

NordPass CTO Tomas Smalakys offers a more detailed explanation:

Each NordPass user has a unique public-key cryptography key pair. The Public Key is always stored in plaintext form. The Private Key, on the other hand, exists in plaintext form only on the user’s end device for a limited period of time and never leaves it.

When we need to store a user’s Private Key, it’s encrypted with secret-key cryptography (XChaCha20-Poly1305-IETF) on the user’s device and only then passed to us. While the app is unlocked, the unencrypted Private Key is stored in the secure memory accessible only to the NordPass application. When the application is locked, either by the user or automatically after a set period of inactivity, the Private Key is deleted from the secure memory.

For the user’s Private Key encryption, the Master Key is used. The Master Key is derived from the Master Password and a 16-byte unique-per-user cryptographic salt using the key derivation function (Argon2id). We ask the user for the Master Password every time we need to decrypt the user’s Private Key.

 

– Tomas Smalakys

NordPass CTO

Tomas further explains that in addition to the encryption principles above, every item (folder, password, credit card, etc.) has two types of data:

• Metadata (title, website address, cardholder name, etc.)

• Secret data.

For secret-key (symmetric) cryptography, we use an authenticated encryption algorithm:

• XChaCha20 stream cipher encryption.

• Poly1305 MAC authentication.

For public-key (asymmetric) cryptography, we use an authenticated encryption algorithm:

• X25519 key exchange.

• XSalsa20 stream cipher encryption.

• Poly1305 MAC authentication.

User data is encrypted on their devices and never leaves the device in plain text. This means that when the data is in transit or at rest, it is fully encrypted. In the database, both metadata and secret data is encrypted. This means that if bad actors are able to get access to the database or any of its backups, no user data can be accessed.

Furthermore, at NordPass, we feel that due to the nature of our product, our security practices should be transparent. Both NordPass and NordPass Business have had their security posture thoroughly audited by Cure53, a renowned German auditing firm.

NordPass Business has also successfully passed the SOC 2 Type 1 Audit, which ensures that NordPass Business provides proper security controls to manage customer data and protect their interests with regard to privacy.

All these measures help to ensure that the sensitive data stored in NordPass vaults is protected at all times. However, these days bad actors are creative and no longer function as a one-person operation. So it’s always important to be vigilant with your own security and use strong, unique passwords for each account as well as enable two-factor authentication whenever possible.

Bottom line

It remains to be seen how the LastPass breach will impact the company and the password management industry as a whole, but one thing is clear: it has shaken user trust and serves as a cautionary tale for the importance of data security.

You’d be hard-pressed to find someone who doesn’t care about their privacy. It’s human nature. You want control over what private information you share and who you share it with. Unfortunately, you can lose this control with a careless click.

What is private data?

Private data is anything that reveals information about you. It can be your name, your photos, your posts on social media, your email addresses, or your IP.

Some of these details are highly sensitive, including your banking information, genetic data, health records, social security number, and home address. As a rule of thumb, any information that could cause you financial or reputational damage can be considered sensitive.

What is data privacy and why is it important?

Data privacy, also known as information privacy, generally refers to a person’s right to choose for themselves when, how, with whom, and to what extent they want to share their private data with others.

As internet usage has become ubiquitous over the years, so has the importance of data privacy and protection. Various websites and applications often collect your private data in exchange for its services.

Some platforms and applications may exceed their reach when it comes to data collection, storage, and usage. Others may have a lax attitude toward private data protection.

The key questions to ask when talking about data privacy are:

1. Who has access to information about you?

2. Who controls this access?

3. Is it secure?

When private data falls into the wrong hands, consequences can be dire. A data breach on an online platform could put your sensitive information into the hands of cyber crooks. Users whose data is leaked are put at risk of identity theft, bank fraud, and other online-related scams and crimes. These days, data is king and there’s no way around it. Thus, it’s not surprising that protection is paramount.

Your privacy in the hands of the government

Various entities handle your private data. First – the government and its institutions. Let’s take the justice system as an example. You cannot go to court or file a claim without revealing your identity. And that’s fine — it wouldn’t be fair to the other side if you were suing them anonymously.

Similarly, you can’t get public services (for example, electricity, a high school education, or healthcare) without identifying yourself.

In a perfect world, the government does not infringe upon your privacy more than necessary. In the real world, some governments store every bit of data they can get their hands on. Even worse, others engage in mass surveillance of their citizens.

Your privacy in the hands of businesses

You can buy apples at a fruit stand and remain a stranger to the vendor. But buy apples online, and you’ll give away private information about yourself. It may be a fact as simple as you liking apples. This information will be sold to an advertiser, and the next time you go online, an ad for apples will pop up on your screen.

Almost everything you do online leaves a data footprint. You have little control over how your digital footprint is collected.

Usually, it works like this. Before you start using a new online service, you have to read a wall of fine print. But you don’t, because who has time to wade through paragraphs of legal jargon? You click “Agree,” and that’s how you begin to give away your private data. The agreement can’t be changed, and you cannot bargain — take it or leave it. This service will collect your data and use it for marketing purposes or sell it to the highest bidder. And there’s nothing you can do.

It’s easy to say “Don’t use these services.” The problem is that most online services collect information. If you want none of your private data on the internet, you have to quit using the internet. And that’s a price most people find too high to pay.

Data protection laws

Over the years, as technology and the internet came to be an inseparable part of our lives, governments around the globe took part in creating and passing laws regulating private data. Most countries today have various laws governing data collection, storage, and usage. Here are some of the most important and impactful ones:

The General Data Protection Regulation (GDPR)

The GDPR regulates data privacy laws across all EU member countries. It was designed to replace previous data regulation laws and provide greater protection and rights to individuals, essentially giving subjects the right to control their personal data and ensuring the right to be forgotten. The GDPR also outlines how individuals’ private data should be collected, stored, and used as well as outlining the limitations. The GDPR is one of the most impactful and comprehensive regulations developed in the past decade.

Data privacy laws in the US

At the moment, the United States has no federal law or legislation that comprehensively addresses data privacy. However, individual states have enacted their own laws and regulations to address issues of data privacy in different industries such as healthcare, finance, and marketing. But, even with all these different laws and regulations, there’s still one important agency that helps to make sure everyone is following the rules.

The Federal Trade Commission (FTC) is the agency that oversees data privacy regulations and ensures consumer protection. The FTC Act grants the organization the authority to prevent unfair or deceptive trade practices and enforce privacy laws.

The FTC can take action against organizations that fail to implement reasonable data security measures, violate consumer data privacy rights, or engage in misleading advertising practices.

There are also other federal laws that govern the collection of information online, such as the Children’s Online Privacy Protection Act (COPPA), the Health Insurance Portability and Accounting Act (HIPAA), the Gramm Leach Bliley Act (GLBA), the Fair Credit Reporting Act (FCRA), and the Family Educational Rights and Privacy Act (FERPA). These laws focus on ensuring the protection of specific types of information, such as data related to children, health, and finances.

National data protection laws

Many countries around the world, including Australia, Canada, and Japan have comprehensive data protection laws in place that outline the ways personal data should be handled, much like the GDPR.

Important data privacy and protection trends for 2023

Increasing use of AI and ML in data protection

As we move into 2023, the use of artificial intelligence (AI) and machine learning (ML) in data security and privacy is becoming increasingly prevalent. AI can be a powerful tool for protecting consumer privacy.

In 2023 we’ll start seeing an increase in the use of both AI and ML to proactively identify and prevent cyber threats and detect patterns that may indicate a potential data breach.

However, data protection through automation has not yet advanced as much as we would like. Nevertheless, in 2023 and beyond, we can expect to see significant improvements in this area as the technology matures and becomes more suited for ensuring the privacy and security of sensitive data.

Data security and privacy will be a priority for consumers

Because data breaches are more common and sophisticated than ever, consumers are unsurprisingly becoming more vigilant about the security of their personal information. Increasingly more people these days are being selective about who they trust with their data. A company’s data-sharing practices and policies now are a crucial factor for many consumers.

In 2023, businesses should be ready for increased scrutiny around their data security and privacy practices. If you are a company that looks to succeed this year, it is vital for you to earn and maintain the trust of your clientele by being transparent about your data protection approach. Trust is a two-way street, and in today’s digital age, it’s more important than ever.

Increasing collaboration between government entities and private companies

Because a decrease in cyber criminal activity is nothing we can bet on in 2023, expect to see heightened levels of collaboration between private companies and government entities aiming to improve data security and privacy.

The collaboration between private and government entities may take many forms, from joint research and development of new security technologies and processes, to more information-sharing in an effort to craft well-rounded regulatory mechanisms.

The rise of passwordless authentication and regulation of biometric data

Passwordless authentication methods are already gaining popularity due to their convenience and security benefits. In 2023, we can expect to see more online service providers adopting various forms of passwordless authentication.

The major advantage of passwordless authentication is that it eliminates the need for users to remember and manage multiple passwords. Additionally, passwordless authentication greatly reduces the risk of password-related security breaches. However, most passwordless technology leverages biometric data for authentication purposes and 2023 might be the year when we will see more regulatory entities coming up with standards and requirements to ensure the secure storage and handling of biometric data. We might see laws and regulations establishing best practices as well as penalties for entities that fail to comply with such standards.

What can you do to protect your data privacy?

Information privacy will become an even hotter topic once technologies create more invasive tools. You’ll be surrounded by facial-recognition cameras, smart speakers that listen to your conversations, e-textiles, wearable health monitors, and other data-gathering gadgets.

That means you must take action now:

• Foster healthy online habits. Refrain from publicly sharing your personal information on social media. Leverage privacy settings and make your social media profiles private to limit exposure. Be weary of attachments or links in emails that come your way from unknown senders. Make use of multi-factor authentication (MFA) and enable it on your online accounts whenever possible. Use strong, unique passwords for all your accounts and employ a password manager to securely store your passwords and other sensitive information.

• Use tools and services that enhance your privacy. Choose private search engines, private email providers, and privacy-focused browsers. And use encryption tools — they’re much more user friendly than they sound. NordPass itself uses state-of-the-art encryption to protect your passwords. In addition, NordVPN makes sure your traffic is invisible to your internet service provider.

• Don’t need it? Then don’t use it. Don’t sign up if you don’t really need the service. And if you do need it, read the fine print before clicking “Agree.” If the fine print is too complicated, look for comments and reviews regarding the service’s privacy policies.

Fight for information privacy and make the internet better for all.