Thousands of crypto wallets at risk from ‘Ill Bloom’ vulnerability: Coinspect

Thousands of crypto wallets at risk from ‘Ill Bloom’ vulnerability: Coinspect

Thousands of crypto wallets across multiple blockchains could be vulnerable due to weak recovery phrase generation.

A snapshot of one analyzed address set as of June 30. Source: Coinspect

Coinspect said it was not publishing details of the active exploit at this stage, but has released a wallet-checking tool for users to see whether their address is potentially exposed.

“We're closely monitoring the Ill Bloom wallet weak randomness risk alert from Coinspect,” SlowMist posted to X on Monday.

Data shows that an attack on May 27 affected 431 wallets out of 2,114 vulnerable wallets, draining a total of $3.1 million in cryptocurrency. Another $2 million was moved on Sunday from exposed wallets.

The historical sum of stolen amounts per chain in the May 27 attack. Source: Coinspect

“Current evidence tells us that users that generated their seed with a hardware wallet are not affected,” said Coinspect. “Further research indicates that most current software wallets are also not vulnerable,” it added. “The strongest candidates are users who generated their seed in less widely used mobile software wallets.”

Related incidents

This type of vulnerability has emerged several times in the past.

• In 2023, Ledger's security team discovered that wallet seeds generated by the Trust Wallet browser extension were vulnerable to brute-force attacks. The flaw resided in the wallet’s entropy generation for new addresses, which limited the total possible mnemonic combinations to roughly four billion and could allow a motivated attacker to run an attack in less than a day with just a few GPUs. Trust Wallet patched the bug before any funds were stolen.
• In the same year, a vulnerability in the Libbitcoin Explorer crypto wallet led to $900,000 in crypto being stolen through private key brute forcing.

Further reading

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