Key Takeaways
- The 'Dark Skippy' method can steal Bitcoin wallet keys with just two transactions.
- The attack can work even if seed words are generated on a separate device.
- Researchers recommend stronger firmware security to prevent such attacks.
Security researchers have unveiled a dangerous new method, dubbed “Dark Skippy,” that can extract private keys from Bitcoin hardware wallets with only two signed transactions.
The method exploits a vulnerability in the wallet’s firmware, potentially affecting all models if users are tricked into downloading malicious firmware.
The method was detailed by researchers Lloyd Fournier, Nick Farrow, and Robin Linus in an August 5 report.
“Dark Skippy” can function even if seed words are generated on a separate device, making it more efficient than previous methods that required numerous transactions.
How it works
The attack involves embedding parts of a user’s seed words into low-entropy secret nonces during transaction signing.
These signatures, which contain only public nonces, are then posted on the blockchain.
Hackers can retrieve these signatures and use Pollard’s Kangaroo Algorithm to compute the secret nonces, eventually deriving the user’s full set of seed words.
To mitigate the risk, the researchers suggest that hardware wallet manufacturers implement security measures like secure boot, locked interfaces, and reproducible firmware builds. They also recommend that users secure their devices in tamper-evident bags or safes, although these methods might be cumbersome.
