KeepKey Wallet Side Channels

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KeepKey

Early versions of the KeepKey hardware wallet firmware were vulnerable to side channel extraction of the PIN information. Basically, different pins present a different voltage profile when performing verification, and sophisticated attackers with physical access to the device could use that to determine the set pin. The firmware was modified so that such an attack was significantly more difficult.

This is a global/international case not involving a specific country.

About KeepKey

"The Next Frontier of Crypto Security. Protect your cryptocurrencies, store your private keys offline, and safeguard your assets from hackers. It’s time to achieve financial freedom in the most secure way with KeepKey."

"[An] attack researchers developed against KeepKey wallets took time to prepare, but with enough planning a hacker could have quickly grabbed a target's PIN in the field. The assault hinges on information that KeepKey wallets inadvertently revealed even when they were locked."

"Regular memory chips, like those used in hardware wallets, give off different voltage outputs at different times. In some situations, researchers can establish a link between these power consumption fluctuations and the data the chip is processing when it displays those changes. Such physical tells are known as "side channels," because they leak information through an indirect physical emanation rather than through any direct access to data. In examining the KeepKey memory chip that stores a user's authentication PIN, the Donjon researchers found that they could monitor voltage output changes as the chip received PIN inputs to determine the PIN itself."

"This doesn't mean the researchers could magically read PINs from a wallet's chip voltage. They first needed to use real KeepKey test devices to take thousands of measurements of the PIN processor's voltage output for each value of known PINs. By collecting a sort of decoder of voltage outputs for each phase of PIN retrieval, an attacker could later identify the PIN of a target wallet."

"On the attacked device we compare the measurement to our dictionary to determine the best match and that is the most probable value of the correct PIN," Guillemet says.

"Shapeshift fixed a vulnerability in its KeepKey wallet with a firmware update in February [2020]." "ShapeShift patched the vulnerability in a firmware update that enhanced the security of the PIN verification function. The fix makes it more difficult to develop a reliable catalog of power consumption outputs that map to PIN values. Even if a wallet hasn't received the update, though, KeepKey owners can still add a passphrase—preferably over 37 characters long—to their wallets that acts as a second layer of authentication."

"ShapeShift recommends that you secure your device with the same caution you would with other investments or valuables. Protect your KeepKey like it could be stolen tomorrow."

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - KeepKey Wallet Side Channels

Date	Event	Description
May 18th, 2020	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

No funds were lost.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

There do not appear to have been any funds recovered in this case.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

General Prevention Policies

In general, it should be assumed that a sophisticated adversary with physical access to a hardware wallet could be able to extract the private key information. You can protect against this attack vector by storing wallets securely, setting up a multi-sig, or clearing the wallet data and only keeping the backup seed phrases stored securely. (Backup seed phrases offer more options for secure storage/transport as compared with a physical device.)

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.