Hi,
I’m sorry but, I do not understand this issue from your short description. Are you trying to say that the all of the user passwords have been reset? There is no way that Kentico
CMS resets all of the passwords just like that. Could you please try to describe me this issue in more detail way (please be more specific about the updates)?
However, you are not using up-to-date version of Kentico CMS. Following bug was fixed in hotfix package 4.0.1:
Security - password stored in plain text and not in SHA1
Best regards,
Miroslav Remias.