Duo Security found a loophole in Google's authentication system that allowed them to Google's two factor authentication and gain full control over a user's Gmail account by abusing the unique passwords used to connect individual applications to Google accounts.
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Duo Security itself a two-factor authentication provider and the flaw is located in the auto-login mechanism implemented in Chrome in the latest versions of Android, that allowed them to use an ASP to gain access to a Google account's recovery and 2-step verification settings.

Auto-login allowed users who linked their mobile devices or Chromebooks to their Google accounts to automatically access all Google-related pages over the Web without ever seeing another login page.
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"Generally, once you turn on 2-step verification, Google asks you to create a separate Application-Specific Password for each application you use (hence "Application-Specific") that doesn't support logins using 2-step verification," Duo Security said in a blog post.


"Then you use that ASP in place of your actual password. In more-concrete terms, you create ASPs for most client applications that don't use a web-based login: email clients using IMAP and SMTP (Apple Mail, Thunderbird, etc.); chat clients communicating over XMPP (Adium, Pidgin, etc.), and calendar applications that sync using CalDAV (iCal, etc.)."
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ASPs are specialized tokens generated for each application that users enter in place of the password/token combination. Duo Security discovered that ASPs actually weren't application-specific, In fact, one code could be used to log in to almost any of the Google's Web properties because of Auto-login feature.

"So, given nothing but a username, an ASP, and a single request to https://android.clients.google.com/auth, we can log into any Google web property without any login prompt (or 2-step verification)"

The researchers have shared their findings with Google and they has fixed this security hole last week.

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