In an update on the data breach disclosed earlier this month, Adobe has said that source code for Photoshop was stolen. Making matters worse, a file containing 150 million usernames and hashed passwords has appeared online, and the company says that 38 million accounts were directly impacted by the incident.

Earlier this month, Adobe announced that during a security audit in September, the company discovered that attackers had accessed customer names and IDs, encrypted passwords, encrypted credit and debit card numbers and expiration dates, as well as other data. On top of the PII lost during the incident, Adobe confirmed that source code Adobe Acrobat, ColdFusion, ColdFusion Builder and "other Adobe products," was also compromised.

Initially, Adobe said that the breach impacted 2.9 million customers worldwide. However, updated information from the company has revealed that at least 38 million users had their accounts exposed.

"So far, our investigation has confirmed that the attackers obtained access to Adobe IDs and (what were at the time valid), encrypted passwords for approximately 38 million active users, Adobe's Heather Edell told our sister website CSO via email.

"We have completed email notification of these users. We also have reset the passwords for all Adobe IDs with valid, encrypted passwords that we believe were involved in the incident – regardless of whether those users are active or not."

Adobe's hacked client data appears

Late last week, a file appeared online with 150 million usernames and hashed passwords. This file, circulating under the tag "150kk clients adobe inc" is nearly 4GB in size, and formatted for easy processing. Links to the file have appeared in various locations online, including AnonNews.org, where investigative journalist Brian Krebs spotted a copy.

CSO has confirmed Krebs' findings, as well as the fact that the German site hosting the original copy has removed it. However, private servers on IRC are circulating the list in order to use it for hash cracking, and a handful of Russian forums were circulating it late last week to mixed interest. Thus, the leaked records are in the wild, exposing the accounts listed to additional risks should the user recycle passwords.

Another update from Adobe also confirms that source code from Adobe Photoshop, the company's hugely popular image suite, was also stolen during the breach last month.

"We publicly disclosed on October 3 that the attackers gained access to source code of numerous Adobe products. Our investigation to date indicates that a portion of Photoshop source code was accessed by the attackers as part of the incident," Edell added.

Adobe says they currently have no indication that there has been unauthorised activity on any customer account involved in the incident. Realistically though, the downside is that they can't rule it out entirely either. Adobe has said their investigation is still ongoing.