Electrum patches high-severity bug exploited to redirect bitcoin transactions during fee bumps
Electrum released version 4.8.3 to patch a critical vulnerability that allowed rogue servers to swap payment destinations and steal bitcoin when users attempted to bump transaction fees.
Electrum developers published a security advisory on Oct. 24 detailing a high-severity vulnerability that has been actively exploited in the wild to steal bitcoin. The issue affects all releases prior to version 4.8.3 and allowed rogue servers to bait users into approving fraudulent payments when attempting to speed up slow transactions.[1][2]
The exploit took advantage of Electrum's design, which relies on connected servers for the status of unconfirmed transactions. Malicious servers withheld legitimate outgoing payments and substituted rival transactions featuring an attacker-controlled address. Because prior versions of the wallet did not verify signatures on unconfirmed transactions in the mempool, it displayed the forged transaction locally. One forgery paid zero fees, baiting the victim to initiate a fee bump; doing so caused Electrum to sign and broadcast a valid replacement transaction that sent the funds to the attacker.[1]
Electrum received two victim reports concerning the attack, noting that the attackers generated addresses ending with the identical four characters as the intended recipients. An initial disclosure was received on Oct. 11, but the fee-bump attack mechanism was confirmed after a user credited as Raju-K12 reported losing funds on Oct. 18.[1]
The patched release, version 4.8.3, prevents the exploit by verifying signatures on mempool transactions spending the wallet's coins before they are added to local history. According to the advisory, clients that connect solely to trusted servers or self-hosted nodes remain unaffected.[1][3]
Key facts
- Electrum developers published a security advisory on Oct. 24 classifying the flaw as high severity and confirming exploitation in the wild.
- All Electrum versions before 4.8.3 are affected by the vulnerability.
- The attack allowed rogue servers to withhold real payments and show a zero-fee rival transaction with an attacker address, baiting users into signing valid replacement transactions via fee bumping.
- Two victims reported that the attacker's substituted address shared the same final four characters as the intended recipient address.
- A user credited as Raju-K12 confirmed losing funds after bumping a transaction fee on Oct. 18.
- Electrum version 4.8.3 resolves the flaw by verifying signatures on mempool transactions spending the wallet's own coins before recording them locally.
- Clients connecting exclusively to trusted servers, such as those run by the users themselves, are not vulnerable.
Sources · 3 sources
- UN
UnchainedArticle ·
Malicious Electrum Servers Steal Bitcoin by Baiting Users Into Fee Bumps Raising the fee on a slow bitcoin payment is meant to rescue it. In at least one case involving the Electrum wallet, it handed the money to an attacker. Electrum’s developers published a security advisory on Oct. 24. The developers label the flaw high severity and report it being exploited in the wild. Every Electrum release before version 4.8.3 is affected. The fix is in version 4.8.3, whose binaries came out Oct. 24. Get Unchained’s crypto news in your inbox with the free Unchained Daily newsletter . Inside the Trick Because Electrum leans on a server for the state of unconfirmed transactions, a dishonest server has room to lie. That trade-off is part of the wallet’s documented design. What the user sees depends on the server. It withholds the real payment from the network and reports a rival version in which the destination has been swapped for the attacker’s. The wallet had no check on that version’s invalid signatures, so it showed the rival as the transaction in progress. One of the forgeries paid no fee, which the advisory says was “presumably in hope of the user bumping its fee.” The user obliged, and Electrum signed a valid replacement that paid the attacker. The developers received two reports. Both victims reported that the thief’s address ended with the same four characters as the one they meant to pay. One of the users, credited as Raju-K12 , “bumped the fee of tx2 and lost money,” the advisory said, referring to the fake transaction. Neither the advisory nor the release notes disclosed how much was taken or which servers were involved. The Fix Version 4.8.3 adds one check . Signatures on mempool transactions that spend the wallet’s own coins are verified before those transactions go into the local history. The advisory lists incoming transactions as an example of what is still not validated. A private disclosure arrived Oct. 11, but the advisory notes that “the bump_fee vector is not realised” at that point. The fee-bump theft became clear a week later, when Raju-K12 reported losing money on Oct. 18. “Clients that connect to servers they trust (e.g. run their own) are not affected,” the advisory said. Short of upgrading, the advisory says to read the outputs on screen every time, bump or no bump. Connecting only to servers you trust also avoids the problem. Related Listen: Bits + Bips: Is Any Cold Wallet Safe? Inside the Coldcard Hack’s Wave Three The post Malicious Electrum Servers Steal Bitcoin by Baiting Users Into Fee Bumps appeared first on Unchained .
Open source - CO
CoindeskArticle ·
Bitcoin wallet bug let rogue servers steal funds when users tried to speed up payments Attackers replaced legitimate transactions with fake ones, then waited for users to approve higher fees. At least one person lost bitcoin before developers patched the flaw.
Open source - CR
CryptoSlate@CryptoSlatePost on X ·
Electrum patched a flaw that let malicious servers redirect Bitcoin payments when users manually raised fees. Version 4.8.3 verifies signatures on wallet-owned inputs after attackers exploited the bug and at least one user lost funds. via @hardeyjumoh https://t.co/D742OHZwWI
Open source