Security Threat Exposed for Browser-based Crypto Wallets

MetaMask, Phantom, Brave and other browser-based crypto wallets say no known user funds have been affected

article-image

Blockworks exclusive art by axel Rangel

share

key takeaways

  • The discovered vulnerability exposes browser wallet users’ secret recovery phrases
  • Affected wallet providers were contacted, and the vulnerability was kept confidential until the security issues were remediated

A number of popular browser-based crypto wallets are vulnerable to hacking under certain conditions, according to new research. 

Blockchain security firm Halborn found several instances where wallets including Brave, MetaMask and Phantom can be compromised under specific computer conditions — adding yet another wrinkle to traders still reeling from recent high-profile decentralized finance (DeFi) hacks. 

The conditions can expose a crypto wallet user’s secret recovery phrase (a series of words generated that gives the owner access to their crypto), which can then be used to change their private key. All told, billions of dollars of digital assets are stored in software wallets. 

Affected wallet providers were contacted and the vulnerability was kept under wraps until the security issues were remediated.

Who is affected? 

Users who meet the following conditions may be at risk:

  • Users who have unencrypted hard drives
  • Users who have previously imported their secret recovery phrase into a web extension on a device that is in the possession of someone else or have had their computer compromised
  • Users who have used the “show secret recovery phrase” checkbox to view their secret recovery phrase on-screen during the import process

Cryptocurrency wallets like the ones impacted by this vulnerability, such as Metamask, are a self-custody wallet — meaning users alone are responsible for safeguarding their private keys. 

“Exchanges like Coinbase or Binance usually hold custody of those keys on the behalf of their customers,” Steven Walbroehl, Halborn’s chief security officer and co-founder, told Blockworks.

“This impact is only for those that self-custody those assets, and it is the users’ responsibility to take it seriously, upgrade the wallets to the patched version listed on the wallet developer’s websites, and to rotate their mnemonic phrase if they think it may be at risk,” Walbroehl said. 

MetaMask has asked users to update their extension versions to 10.11.3 and later and to “take the time to enable full disk encryption on computers.”

Echoing Walbroehl, Dan Finlay, founder and group manager at MetaMask wrote in a blog post that users should “remember that it’s your responsibility to keep your computer secure. No wallet or software can keep itself safe if the system it runs on is compromised. Take time to learn how to avoid installing a virus on your computer.” 

Phantom, meanwhile, wrote in a blog post that to protect themselves on Web3, on top of general internet safety measures, users should diversify their wallets to minimize risk and use hardware wallets to store large amounts of assets and currencies.

“Other mitigations include storing the mnemonic phrase/key on a hardware-based wallet like Trezor or Ledger. These wallets still work with software wallets like Metamask when physically connected via a USB cable…but it protects the keys from attackers that may access your disk,” Walbroehl said.

Halborn has been rewarded $50,000. The wallet providers did not immediately return requests for comment.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Unlocked by Template.png

Research

With the spot ETH ETF approval, the institutions are coming. stETH - given its dominance in marketshare, existing liquid market structures, and highly desirable properties - is poised for institutions.

article-image

Launching cryptocurrencies the old fashioned way may soon make a return

article-image

Kraken and CertiK brought their beef to social media after Kraken said researchers exploited $3 million through a bug

article-image

NVIDIA’s historic run is only deepening the divide between mega-cap tech stocks and the rest of the market.

article-image

EIP-7702 was quickly adopted for the next Ethereum upgrade, but developers haven’t quite locked it down