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LastPass experienced a significant security breach where a hacker accessed their Vault data, including encrypted usernames, passwords, notes, and URLs. The hacker initially breached LastPass in August, obtaining source code and technical information, then targeted an employee to access their credentials and security keys. The stolen data was from a separate cloud-based backup storage service, not LastPass's main network. The stolen data is encrypted with 256-bit AES and requires a master password for decryption. LastPass reassures that they do not have access to the customer's master password.