Blockchain.info Insecure Android Key Generation

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Blockchain.info Logo/Homepage

The Blockchain.info web wallet had an issue where private keys generated on the Android platform were not being generated with proper randomization, allowing a thief to steal user funds. Between this and another attack affecting key generation on the Android platform, a total of over 59 bitcoins were taken from wallet users. It appears that this exploit only affected 3.5 BTC in two transactions. Blockchain.info provided refunds to affected users.

About Blockchain.info

"The world’s most popular crypto wallet. Over 80 million wallets created to buy, sell, and earn crypto." "As they say, not your keys, not your crypto. Blockchain.com Private Key Wallets are the most widely-used wallets for self-custody of your crypto. We make it easy for people who are ready to control their private keys to hold them with a Secret Private Key Recovery Phrase." "When it comes to ensuring that your crypto is secure, we think about every last detail so you don’t have to."

"The popular Blockchain website primarily offers market data and serves as the main block chain explorer for the bitcoin currency. However, users can also create web-based wallets to send and receive bitcoins."

Homepage:

The Reality

The blockchain.info wallet software contained a critical flaw in the key generation algorithm on Android mobile phones.

What Happened

"Another bug has been discovered in a bitcoin wallet, leading to the theft of around 50 bitcoins."

Key Event Timeline - Blockchain.info Insecure Android Key Generation

Date	Event	Description
July 23rd, 2013 1:34:00 PM MDT	Theft Transaction	This is believed to be the first of many blockchain transactions which started to drain bitcoin from vulnerable wallets.
August 20th, 2013 12:46:21 PM MDT	BitcoinTalk Thread	A thread on BitcoinTalk discusses the breached bitcoin addresses.

Technical Details

"[B]itcoins are reportedly being stolen from compromised addresses. Over 55 bitcoins are said to have been sent to this address from compromised addresses."

"This problem will affect any Android-based bitcoin wallet user who has used a bitcoin address more than once. It means that a person could recover that user’s private signature by analyzing the transaction in the block chain, enabling them to spend bitcoins from that address."

This flaw affects "the generation of private keys for bitcoin addresses. The repetition of random numbers enabled attackers to determine the private keys of users' wallets, which in turn enabled them to take ownership of the bitcoin addresses associated with those keys."

"Multiple Android clients were affected by that flaw (including Blockchain.info's client, for which it issued a patch)."

"The solution is to generate a new bitcoin address using a repaired version of the random number generator, and then to send all your money in your wallet back to yourself, according to Bitcoin.org. However, this relies on getting an updated version of your Android wallet if you're still going to use an Android-based app."

Total Amount Lost

Over 55 bitcoin.

The total amount lost has been estimated at $5,000 USD.

Immediate Reactions

TBD

Ultimate Outcome

"Blockchain.info has released an update, according to Hearn, which allows users to manually rotate keys. Another update in the next few days will automatically send all coins controlled by previous keys to the new one."

"Patches have now been deployed, Please ensure you upgrade to the latest version of your Blockchain.info client."

"When asked about the identity of the attacker(s), Reeves confirmed that the attacker is an individual and that all stolen funds have been sent to [one bitcoin address]." "Significantly, funds transferred to that account also include funds taken from Android users earlier this month, suggesting that the same person could be behind the theft of bitcoins using both bugs."

"A list of the addresses affected by the random number generator bugs on both Blockchain and Android were published on the Bitcoin forum, and has also been updated with new finds."

"[T]he company is now offering refunds to users who lost bitcoins due to the flaw."

For those looking to recover lost funds, Reeves told us: "If someone thinks they have had funds stolen, if it is due to this bug it is very likely the coins will have been sent to the above address. If in doubt they can contact help@blockchain.info and I will investigate further. Only a couple of BTC have been refunded so far."

Total Amount Recovered

There are reports of a couple of bitcoin being returned. There do not appear to have been any other funds recovered in this case.

Ongoing Developments

Reeves hinted at a glimmer of hope for lost funds: "It depends on [the attacker's] intentions, but there is still a possibility they might return the funds." But the prevailing message is: don't bank on it.

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.