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. – A flaw in Electrum allowed malicious servers to substitute fake pending Bitcoin transactions that users could unknowingly authorize when using Replace-by-Fee, with at least one theft confirmed. – Electrum released version 4.8.3 on Oct. 24 to verify signatures on relevant unconfirmed transactions, but earlier versions remain vulnerable when connected to malicious servers. – Users should upgrade Electrum and carefully verify payment addresses and amounts before signing transactions; those using only trusted servers, including their own, were not exposed
A bitcoin wallet security flaw allowed malicious servers to trick users into signing payments to attackers when they tried to speed up transactions, with developers confirming at least one case in which money was stolen. Electrum, one of Bitcoin’s oldest software wallets, disclosed the vulnerability on Saturday, saying some servers were already exploiting it. The developers received two reports in October, including one from a user who lost funds after approving what appeared to be a routine transaction-fee increase.
The attack exploited how Electrum handles bitcoin payments that have not yet been confirmed by the network. Unlike a full Bitcoin node, Electrum relies on outside servers to retrieve transaction histories and broadcast payments. Before the fix, the wallet trusted those servers to report pending transactions without checking whether their signatures were valid.