ARGENT

DESCRIPTION OF EVENTS

"Argent replicates the experience of using a crypto wallet as a CC card with the concept of Guardians. Guardians are trusted devices with limited permissions to a user’s wallet, helping recover access to a wallet if the original owner loses access."

"The guardian feature lets Argent users give selected accounts permission to execute actions on the wallet, like locking it or approving a wallet recovery." "Argent users can add “guardians” to their wallets. These are trusted accounts (externally-owned or contracts) that are given permission to execute specific actions on the wallet. Today, all Argent wallets created in the official mobile application include a default guardian (controlled by Argent), added during creation of the wallet, using Argent’s latest WalletFactory contract (deployed on March 30th 2020). However, all wallets created before March 30th 2020 were initially created without a guardian, since they were created using Argent’s old WalletFactory contract, which did not allow adding a guardian during creation."

"Furthermore, the contracts impose no restrictions on the number of guardians a wallet may have, allowing wallets without guardians." "Before March 30, 2020, users could create wallets without guardians by default." "Users may decide to revoke the default guardian added by Argent, add a user-controlled guardian (such as a hardware wallet), or add a trusted-party’s Argent wallet as a guardian."

"White-hat hackers found a severe vulnerability in the DeFi-focused mobile wallet Argent in OpenZeppelin on Jun. 18." "OpenZeppelin security researcher Alice Henshaw discovered a vulnerability within Argent that would have allowed user funds to be drained from wallets that did not have Argent’s “guardian” feature."

"A high-severity vulnerability in the Argent wallet would have allowed attackers to take over wallets with no guardians. User action would have been needed to prevent the takeover attack in less than 36 hours, which then would have opened an alternative Denial of Service (DoS) attack vector with potential to indefinitely freeze their funds." "The uncovered vulnerability would have enabled hackers to freeze funds in wallets without Guardians. By the time the vulnerability was discovered, over 300 wallets with more than 160 ETH were at risk."

"The guardianCount function of the GuardianStorage contract, in charge of keeping track of how many guardians wallets have, returns zero for wallets with no guardians. As a consequence, the executeRecovery function can be called without signatures for a wallet with zero guardians – and therefore be triggered by any attacker wishing to take control of the wallet and steal its funds."

"The only available mitigation for the described attack is to cancel the malicious recovery and add a guardian before the attacker can launch the attack again. While the mitigation would be effective, only technically skilled users, proficient in Ethereum and the wallet’s internals, would be able to execute the necessary actions to do it in less than 36 hours, while all their funds are at risk."

"Wallets had to meet 2 criteria to be at immediate risk of attack. They must have had 0 guardians, and have upgraded from the old RecoveryManager module to the new one which was deployed on May 7th. At the time of reporting the vulnerability, there were 329 wallets that met such criteria, 74 of which had positive ETH or token holdings. Only 13 of the 329 wallets had added a guardian after 3 days of our initial report."

"Considering the great number of deployed wallets with zero guardians, our preferred fix was to allow wallets with zero guardian, updating the logic in the getRequiredSignatures function of the RecoveryManager contract so that the case for wallet recovery execution ensured that if a wallet had no guardians, the function did not return 0."

"Argent’s team arrived at the same conclusions, and reported they would be implementing our suggested fix. We advised Argent that the fix should be reviewed by Argent’s trusted security auditors. In the meantime, Argent reported that they were already contacting affected users encouraging them to add at least one guardian to their wallets as soon as possible. Finally, Argent deployed the fixed version of the RecoveryManager contract to mainnet, which can be found at address 0xdc350d09f71c48c5d22fbe2741e4d6a03970e192."

"Fortunately, none of them suffered losses as the team implemented fixes in time." "No Argent funds were affected and a patch has been issued, according to the firm. Henshaw received $25,000 in dai as compensation."

"The Argent team has taken quick action to fix this issue so that no user funds were impacted," said Demian Brener, CEO of OpenZeppelin.

Argent allowed users to set up their wallet to have "guardians" who could assist in recovery.

By default, there were no guardians set up. If a user didn't set up guardians, then anyone could take their funds.

The issue wasn't exploited because there was a 36 hour cooldown and the problem was quickly identified.

HOW COULD THIS HAVE BEEN PREVENTED?

There were no user funds lost in this case.

Check Our Framework For Safe Secure Exchange Platforms

List of Ethereum Smart Contracts Post-Mortems - Security - OpenZeppelin Community (Jun 23)
Argent Vulnerability – Technical Report – OpenZeppelin blog (Jun 22)
https://aws1.discourse-cdn.com/business6/uploads/zeppelin/original/2X/a/acfd7fe8ae545515b444e9233486b20a9b46c997.png (Jun 22)
Argent – The best Ethereum wallet for DeFi and NFTs. (Jun 22)
Argent Vulnerability - Technical Report - Security - OpenZeppelin Community (Jun 22)
Millions Lost: The Top 19 DeFi Cryptocurrency Hacks of 2020 | Crypto Briefing (May 22)
How to recover my wallet - complete guide – Argent Labs (Jul 29)
'High severity' vulnerability in Argent wallet could have allowed attackers to steal user funds (Jul 29)
@argentHQ Twitter (Jul 29)

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