Yahoo confirms largest data breach on record as 500 million account details stolen

Yahoo have placed the blame on a "state-sponsored actor" for the theft, which first surfaced in August after reports of 200m account details being sold on the dark web by cyber criminal Peace.

Verizon Communications agreed a $4.8bn deal earlier this year to buy Yahoo's core business, and Thursday's admission may have some effect on that transaction.

The hack includes vast amounts of personal information from users, such as email addresses, passwords and telephone numbers. Yahoo said that credit card details were not part of the breach.

Few details were released about the hack by the US company, but it is said to have taken place in late 2014. The Federal Bureau of Investigation confirmed it is investigating the incident.

Verizon were briefed on the matter earlier this week, and as of yet has not made a decision on how it will affect its acquisition of Yahoo.

"We understand that Yahoo is conducting an active investigation of this matter, but we otherwise have limited information and understanding of the impact," Verizon said in a statement. "We will evaluate as the investigation continues."

Web security expert Brett McDowell from the FIDO Alliance says that threats to our personal information are growing by the day.

"What happened to Yahoo and their customers is tragic, but what is more tragic will be the next several data breaches at this scale which, unfortunately we have every reason to expect. The frequency and severity of these data breaches is only getting worse year-over-year," McDowell said.