The Day We Got Hacked: A Post-Mortem That Changed Everything

It was 3:47 AM on a Tuesday when my phone started vibrating like it was possessed. Not the gentle buzz of a single notification, but that continuous, angry rattle that means something is very, very wrong. I grabbed it from the nightstand, squinting at a screen flooded with PagerDuty alerts, Slack messages, and automated monitoring warnings all screaming the same basic message: **we were under attack**. I'm Alex Chen, VP of Engineering at a Series B fintech startup. At the time of this incident, we were processing about $2 million in transactions daily, had 150,000 active users, and I had just finished telling our board how our security posture was "enterprise-grade." That confidence aged about as well as milk left in the sun. This is the story of the 72 hours that followed, the $340,000 it cost us, and the complete security overhaul that came after. More importantly, it's about the decade of arrogance and assumptions that led us there. ## The First Hour: Denial and Discovery The first alert came from our fraud detection system at 3:43 AM. It flagged an unusual pattern: 847 wire transfer requests originating from 847 different user accounts, all within a 90-second window. Each request was for amounts carefully calculated to stay just under our automated approval threshold of $9,999. My first thought, groggy and desperately hoping for simplicity: "It's probably a bug in the fraud detection system. This happens." It wasn't a bug. By the time I had my laptop booted and VPN connected—maybe eight minutes later—our DevOps lead James had already killed all outbound payment processing. Smart move. It probably saved us another half million dollars. But the damage that had already been done was substantial: 126 transfers had already cleared our automated checks and were in flight to destination accounts. ```typescript // This was our "secure" wire transfer approval logic // Spoiler: It was neither secure nor logical async function processWireTransfer(request: WireTransferRequest) { const user = await db.users.findOne({ id: request.userId }); // Check if user is authenticated if (!user.sessionToken) { throw new Error('User not authenticated'); } // Verify session token is valid const session = await redis.get(`session:${user.sessionToken}`); if (!session) { throw new Error('Invalid session'); } // Auto-approve transfers under $10k if (request.amount < 10000) { return await executeTransfer(request); } // Require 2FA for larger amounts return await require2FAApproval(request); } ``` Look at that code. Really look at it. Do you see the problem? Because I didn't, not for another hour and a half. This code had passed code review. It had passed our security audit. It had been in production for fourteen months without incident. ## Hour Two: The Breach Expands By 4:30 AM, we had our incident war room assembled. Me, James from DevOps, Sarah from Security, and our CTO Marcus dialing in from a vacation in Costa Rica. We were all operating on the same assumption: someone had compromised a batch of user accounts through credential stuffing or a phishing campaign. We were wrong. Sarah pulled the access logs for the affected accounts. "This doesn't make sense," she said, and I felt my stomach drop. That phrase—"this doesn't make sense"—is never followed by good news in a 4 AM war room. The compromised accounts had logged in from their regular IP addresses. From their regular devices. With their regular browser fingerprints. The requests passed every fraud check we had: geographic location, time-of-day patterns, device recognition, behavioral analysis. Everything looked legitimate because, from a technical standpoint, it was. "They're not compromising user accounts," Sarah said slowly, the realization dawning. "They're compromising our session management." And that's when we found it. ## The Vulnerability: A JWT Nightmare Our authentication system used JSON Web Tokens (JWTs). Standard practice, right? Stateless, scalable, all the buzzwords. We generated them on login, they contained the user ID and permissions, and they were signed with our secret key. Here's what our JWT looked like: ```json { "header": { "alg": "HS256", "typ": "JWT" }, "payload": { "userId": "user_1234", "email": "victim@example.com", "iat": 1640000000, "exp": 1640086400 }, "signature": "..." } ``` The attackers had discovered—and I still don't know how—that our JWT secret key was exposed in a client-side JavaScript bundle that had accidentally been deployed to production six weeks earlier. Just sitting there in a minified .js file, waiting to be found. Actually, I do know how they found it. Someone on our team had made exactly one commit that included our .env file in the build output. One commit. It was reverted twelve minutes later. But our CDN cached that JavaScript bundle, and it stayed cached for the full 30-day cache lifetime. With our JWT secret, the attackers could forge any token they wanted, for any user, with any permissions. They could literally become anyone in our system. ```typescript // This is what the attackers were doing import jwt from 'jsonwebtoken'; // They had found this secret in our exposed bundle const SECRET = 'prod_secret_key_do_not_commit_2023'; // Generate tokens for any user function impersonateUser(userId: string) { return jwt.sign( { userId: userId, email: `user${userId}@generator.com`, iat: Math.floor(Date.now() / 1000), exp: Math.floor(Date.now() / 1000) + 86400 }, SECRET ); } // Now initiate transfers from any account async function drainAccount(userId: string) { const token = impersonateUser(userId); const response = await fetch('https://api.ourplatform.com/wire-transfer', { headers: { 'Authorization': `Bearer ${token}` }, body: JSON.stringify({ amount: 9999, destination: 'attacker_account_127' }) }); } ``` ## Hours Three Through Twenty-Four: Damage Control Once we understood the attack vector, we moved fast: **4:45 AM**: Rotated JWT secret immediately. This invalidated every existing session—logged out every single user. Our support team was going to hate us. **5:15 AM**: Deployed emergency patch requiring re-authentication for all financial operations, regardless of session validity. **6:00 AM**: Started tracing the 126 completed transfers. Most went to newly-created accounts at smaller banks. Some had already been withdrawn as cash. A few—and this still amazes me—went to accounts where the attackers had helpfully provided their real government IDs during account creation. **7:30 AM**: Conference call with our bank's fraud department, FBI cybercrime division, and our lawyers. This is where I learned that our cyber insurance policy had a $500,000 deductible and started doing mental math about our runway. **9:00 AM**: Press release went out. We decided on full transparency. "A security incident has occurred. All user sessions have been invalidated as a precautionary measure. No user funds are at risk." That last part was technically true—our terms of service made us liable for fraudulent transfers, not users. **2:00 PM**: Started notifying the 847 users whose accounts had been used. Legally required within 72 hours in our jurisdiction, but we wanted to move faster. **11:00 PM**: I tried to sleep. Couldn't. ## The Post-Mortem: How This Happened The next week, we held the most painful post-mortem of my career. We identified not one, not two, but seven critical failures that had to align perfectly for this attack to succeed. ### Failure 1: Secret Management We stored secrets in .env files committed to our repository. Yes, they were supposed to be .gitignored. Yes, there were supposed to be pre-commit hooks preventing this. But someone had disabled the hooks because they "slowed down the workflow," and we never noticed. **What we changed**: Migrated to HashiCorp Vault. Secrets are now injected at runtime, never stored in repositories, never accessible from client builds. ### Failure 2: Build Process Our webpack configuration had a bug where environment variables could leak into production bundles if a certain combination of build flags was used. The developer who did this didn't even realize it was possible. ```javascript // The problematic webpack config module.exports = { plugins: [ new webpack.DefinePlugin({ 'process.env': JSON.stringify(process.env) // This was the bug }) ] }; // It should have been: module.exports = { plugins: [ new webpack.DefinePlugin({ 'process.env.NODE_ENV': JSON.stringify(process.env.NODE_ENV), 'process.env.API_URL': JSON.stringify(process.env.API_URL) // Explicitly list only what's needed }) ] }; ``` **What we changed**: Complete build pipeline audit. Automated scanning for any secrets in output bundles. Multiple layers of validation. ### Failure 3: Code Review That commit with the webpack bug? It got +1'd by two senior engineers. Not because they approved of exposing secrets, but because they didn't recognize that's what the change was doing. The PR description was "Fix build errors" and the diff was 200+ lines of dependency updates. **What we changed**: Required security review for any changes to build configuration, authentication, or financial operations. No exceptions, even for hotfixes. ### Failure 4: Security Scanning We had automated security scanning. It ran on every commit. It never detected the exposed secret because it was looking for secrets in the repository, not in the compiled output. **What we changed**: Added bundle analysis to our security scanning. We now scan both source code AND build outputs, on every deployment. ### Failure 5: CDN Caching Our aggressive CDN caching meant that even after we reverted the problematic commit, the vulnerable JavaScript file remained accessible for 30 days. **What we changed**: Implemented cache-busting with content hashes. Added ability to do emergency cache purges. Reduced maximum cache lifetime for JavaScript to 24 hours. ### Failure 6: Session Validation Remember that code I showed you earlier? Here's the problem: ```typescript // We verified the JWT signature, which proves it was signed with our secret // But we never checked if the user actually created this session const session = await redis.get(`session:${user.sessionToken}`); if (!session) { throw new Error('Invalid session'); } ``` We checked Redis for the session token, but the JWT itself didn't contain the session ID—it contained the user data directly. So if you had a valid signature (which the attackers did, because they had our secret), you could bypass the Redis check entirely. **What we changed**: Every session now requires server-side validation. No more stateless JWTs for financial operations. We moved to opaque session tokens that are just random IDs that look up actual session data server-side. ### Failure 7: Monitoring and Alerting We had fraud detection. But it was tuned to catch individual account compromises, not systemic authentication bypasses. When 847 accounts made wire transfers simultaneously, it should have been blindingly obvious. **What we changed**: Added behavioral analysis that looks at system-wide patterns, not just individual accounts. Tightened thresholds. Added circuit breakers that halt financial operations if fraud metrics spike. ## The Financial Impact: $340,000 and Counting Final tally: - **Direct losses from transfers**: $126,000 (we recovered about $48,000, so net loss of $78,000) - **Legal fees**: $92,000 - **Enhanced security audit**: $55,000 - **Upgraded cyber insurance**: $31,000 additional annual premium - **Engineering time (opportunity cost)**: ~$84,000 (4 weeks of reduced velocity across the team) Plus intangibles: user trust, media coverage, board confidence. Three enterprise customers churned explicitly citing the breach. ## What I Learned About Security ### 1. Security is Not a Checkbox We had passed our SOC 2 Type II audit three months before the breach. We had penetration testing annually. We had a bug bounty program. On paper, we looked secure. But security is a mindset, not a document. Every single safeguard we had could be defeated by one developer having a bad day and one reviewer not asking enough questions. ### 2. Defense in Depth Isn't Optional Any one of those seven failures I listed? We could have survived it. The problem was they all failed at once. That's not bad luck—it's inadequate redundancy. Now we design security in layers. If an attacker compromises one layer, three others should still stop them. ### 3. Blast Radius Matters Even with perfect security, breaches will happen. The question is: how much damage can an attacker do? Our JWT architecture gave attackers the keys to the kingdom. They could impersonate any user, access any data, execute any transaction. Now we have: - Short-lived tokens (15 minutes instead of 24 hours) - Re-authentication required for sensitive operations - Transaction velocity limits per account - Automated circuit breakers - Separated permission domains (a token valid for reading account data can't initiate wire transfers) ### 4. Incident Response is More Important Than Prevention We got lucky. Our monitoring caught the attack four minutes after it started. Our DevOps lead made the right call to kill payment processing. We had playbooks for incident response. But we also got exposed. We hadn't practiced our incident response in six months. Our playbooks assumed different attack vectors. We wasted precious minutes chasing the wrong hypotheses. Now we run incident response drills quarterly. We practice with realistic scenarios. We've gotten our response time for critical security events down from "8 minutes until someone competent is looking at it" to "45 seconds until automated systems respond, 2 minutes until humans are engaged." ## The Human Element: Taking Responsibility At our all-hands meeting the Friday after the breach, I stood up and told the company: "This was my fault." Not the developer who made the commit. Not the reviewers who approved it. Not the attacker who exploited it. Mine. As the VP of Engineering, I had created a culture where: - Speed was valued over security - Pre-commit hooks were seen as annoyances to be disabled - Code reviews focused on functionality, not safety - Security was "someone else's problem" I had hired a security team and then treated security as their job alone, rather than everyone's responsibility. I had approved budgets that prioritized features over infrastructure hardening. The breach was a technical failure, but the root cause was organizational and cultural. ## What Changed: Our New Security Culture ### Every PR Now Requires Security Consideration Our PR template now includes: ```markdown ## Security Checklist - [ ] Does this PR handle user credentials or auth tokens? - [ ] Does this PR involve data encryption or secrets management? - [ ] Does this PR change build configuration or dependency versions? - [ ] Does this PR modify session handling or authorization logic? - [ ] Could this PR introduce an injection vulnerability? (SQL, NoSQL, command, etc.) If any boxes checked: requires @security-team review ``` ### We Opened Our Post-Mortem We published our full post-mortem publicly. Every technical detail, every failure mode, every lesson learned. It's still on our blog. Some board members thought this was insane. "You're telling attackers exactly what went wrong!" But I believe transparency builds more trust than it costs in exposure. And you know what happened? We got contacted by three other companies who had similar vulnerabilities. We helped them fix their issues before they got hit. ### Security is Now Part of Performance Reviews 25% of every engineer's performance review is now based on security practices: - Participation in security training - Security issues found or fixed - Adherence to security guidelines - Contributions to security tooling or documentation If you're great at shipping features but sloppy about security, you don't get promoted. Period. ### We Hired a CISO We'd had a "Head of Security" (Sarah) who reported to me. Smart person, good at her job, but not empowered to actually change the organization. Now we have a CISO who reports to the CEO and has veto power over any deployment. She can halt a release if she's not satisfied with the security review. She has budget authority. She sets security standards that engineering must meet. It's occasionally frustrating. But it's necessary. ## Three Years Later: Was It Worth It? The breach happened three years ago. Today: - We've had zero security incidents - Our security posture is legitimately enterprise-grade - We passed our most recent pen test with zero critical findings - We've been able to land enterprise contracts we couldn't before But here's what really matters: **I sleep better.** Not because I think we're invulnerable—we're not. But because I know that if we get hit again (and statistically, we probably will), we'll detect it faster, respond better, and limit the damage. I also know that every person in our engineering organization, from junior developers to the CTO, thinks about security first. It's in our DNA now. ## Advice for Other Engineering Leaders If you're reading this thinking "that could never happen to us," you're probably in the most danger. Here's my unsolicited advice: ### 1. Do a Threat Modeling Exercise Get your senior engineers in a room. Pick your most critical system. Ask: "How would we break this if we were the attacker?" Document every attack vector you can think of. Then ask: "What's stopping each of these attacks?" If the answer is "well, nobody knows about this endpoint" or "an attacker would need to guess this secret," you have a problem. ### 2. Practice Your Incident Response Run a security drill. Don't tell anyone it's coming. At 2 AM on a Wednesday, page your on-call engineer with a simulated security incident. See what happens. You'll learn more from that drill than from a hundred security audits. ### 3. Check Your Build Output Right now, go look at your production JavaScript bundles. Run `strings` on them. See what's in there. I guarantee you'll be surprised. ```bash # Do this right now curl https://yourproductionsite.com/bundle.js | strings | grep -iE '(secret|key|password|token)' ``` If you find anything that looks like a secret, you have the exact same vulnerability we had. ### 4. Rotate Your Secrets When was the last time you rotated your JWT secret? Your database password? Your API keys? If the answer is "when we first set up the system," you need a rotation policy. Yesterday. ### 5. Implement Multi-Factor Everything We require MFA for: - All employee accounts (obviously) - All production deployments - All database access - All financial operations - All admin endpoints Yes, it's annoying. Yes, it slows things down. But you know what slows things down more? A three-day security incident. ## The Questions I Still Think About **Could we have prevented this?** Yes, easily, at a dozen different points. **Should we have prevented this?** Absolutely. We had the knowledge, the resources, and the warnings. **Will it happen again?** Probably not exactly this way. But attackers are creative. There's likely another vulnerability in our system right now that we haven't found yet. **Was it worth $340,000 to learn these lessons?** I wish we could have learned them cheaper. But better to learn them at our current scale than after our Series C when the stakes would have been ten times higher. **Am I a better engineering leader now?** I think so. I'm certainly more paranoid. I ask different questions in design reviews. I spot red flags I would have missed before. I've internalized a truth that I only intellectually understood before: **security isn't about preventing every possible attack. It's about making attacks so expensive and difficult that attackers move on to easier targets.** ## Conclusion: The Breach That Made Us Better I titled this "The Day We Got Hacked," but that's not quite accurate. We got hacked over a period of several months—slowly, through accumulating bad practices, deferred security work, and cultural blind spots. The attack itself took 90 seconds. The response took 72 hours. The recovery took three months. But the real change—the cultural transformation that made us actually secure—took years and is still ongoing. If there's one thing I want you to take from this story, it's this: **you are not as secure as you think you are**. None of us are. Security is not a destination; it's a continuous practice of paranoia, validation, and improvement. And if you're thinking "we should probably rotate our secrets," or "maybe we should check our build output," or "I wonder if our JWT implementation has the same problem"—good. That paranoia might just save you from writing your own version of this post-mortem. Stay paranoid, my friends. And may your 3 AM phone calls be about inconsequential monitoring false alarms. --- *Alex Chen is VP of Engineering at a fintech startup that shall remain nameless (NDAs are fun!). He's available for speaking engagements about security incidents at alex@definitely-not-my-real-email.com, and for consulting on security incident response at rates that will make your CFO cry.*