Bessie Liu

<div id="highlights-block_62aa2d415a283" class="highlights">
 <ul>
 <li>The discovered vulnerability exposes browser wallet users’ secret recovery phrases</li>
 <li>Affected wallet providers were contacted, and the vulnerability was kept confidential until the security issues were remediated</li>
 </ul>
 
</div>



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.&nbsp;



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.&nbsp;



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



<h3 class="wp-block-heading">Who is affected? </h3>



Users who meet the following conditions may be at risk:



<ul class="wp-block-list"><li>Users who have unencrypted hard drives</li><li>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</li><li>Users who have used the “show secret recovery phrase” checkbox to view their secret recovery phrase on-screen during the import process</li></ul>



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&#8217; responsibility to take it seriously, upgrade the wallets to the patched version listed on the wallet developer&#8217;s websites, and to rotate their mnemonic phrase if they think it may be at risk,” Walbroehl said.&nbsp;



MetaMask has <a href="https://medium.com/metamask/security-notice-extension-disk-encryption-issue-d437d4250863" target="_blank" rel="noreferrer noopener">asked</a> 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 <a href="https://medium.com/metamask/security-notice-extension-disk-encryption-issue-d437d4250863" target="_blank" rel="noreferrer noopener">wrote in a blog post</a> 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 <a href="https://phantom.app/blog/demonic-vulnerability" target="_blank" rel="noreferrer noopener">blog post</a> 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&#8230;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.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Brave

Newsletter

Blockworks Research