OpenSea Phishing Attack

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OpenSea

OpenSea posts and official tweet to community that they are investigating the situation and believe that it's a phishing attack.

About OpenSea

"The world’s first and largest digital marketplace for crypto collectibles and non-fungible tokens (NFTs). Buy, sell, and discover exclusive digital items." "Discover, collect, and sell extraordinary NFTs. OpenSea is the world's first and largest NFT marketplace."

"As the first and largest marketplace for Non-Fungible Tokens and Semi-Fungible Tokens, OpenSea provides a first-in-class developer platform consisting of an API, SDK, and developer tutorials. Feel free to browse around and get acclimated with developing smart contracts and interacting with NFT data."

"Fascinated by the [CryptoKitties] movement that was forming, Devin Finzer and Alex Atallah joined early adopter communities in Discord and started talking to users. With the OpenSea beta launch in December 2017, the first open marketplace for any non-fungible token on the Ethereum blockchain was born."

"Valued at $13 billion in a recent funding round, OpenSea has become one of the most valuable companies of the NFT boom, providing a simple interface for users to list, browse, and bid on tokens without interacting directly with the blockchain."

"The Zhifan security team analyzed and found that [a] hacker address 0x3E0…8A74 created a smart contract 0xa2…45bD at 9:31:12 (UTC) on January 22, one month ago."

The Reality

"A number of users posted a warning on Twitter [on the] morning [of February 19th] that the new migration contract launched by OpenSea yesterday was suspected of having a bug, and the attacker used the bug to steal a large amount of NFT and sell more than 0 ~$3.4 million) NFTs, most of which have been deposited in TornadoCash." "Early explanations blamed a new contract that OpenSea had rolled out, or an airdrop from a new NFT marketplace called X2Y2. People urged NFT owners to revoke permissions for both the OpenSea contract and for X2Y2 until more was known, although one of the most popular websites helping people do so went down shortly after from the high traffic."

"OpenSea was in the process of updating its contract system when the attack took place, but OpenSea has denied that the attack originated with the new contracts. The relatively small number of targets makes such a vulnerability unlikely, since any flaw in the broader platform would likely be exploited on a far greater scale."

What Happened

"Panic erupted on February 19 as a few users saw their wallets emptied of valuable NFTs without knowing why, and many others feared the same could happen to them." "[A]ttackers stole hundreds of NFTs from OpenSea users, causing a late-night panic among the site’s broad user base. A spreadsheet compiled by the blockchain security service PeckShield counted 254 tokens stolen over the course of the attack, including tokens from Decentraland and Bored Ape Yacht Club, with the bulk of the attacks taking place between 5PM and 8PM ET."

"An hour and a half after users began to report missing NFTs, OpenSea finally acknowledged the issue. They tweeted that they were "actively investigating rumors of an exploit associated with OpenSea related smart contracts", and wrote that they believed it was a phishing attack coming from outside of OpenSea, rather than an issue with their contract."

"It was later determined that an attacker had successfully phished 17 OpenSea users into signing a malicious contract, which allowed the attacker to take the NFTs and then flip them."

"The attack appears to have exploited a flexibility in the Wyvern Protocol, the open-source standard underlying most NFT smart contracts, including those made on OpenSea. One explanation (linked by CEO Devin Finzer on Twitter) described the attack in two parts: first, targets signed a partial contract, with a general authorization and large portions left blank. With the signature in place, attackers completed the contract with a call to their own contract, which transferred ownership of the NFTs without payment. In essence, targets of the attack had signed a blank check — and once it was signed, attackers filled in the rest of the check to take their holdings."

"[M]any details of the attack remain unclear — particularly the method attackers used to get targets to sign the half-empty contract. Writing on Twitter shortly before 3AM ET, OpenSea CEO Devin Finzer said the attacks had not originated from OpenSea’s website, its various listing systems, or any emails from the company. The rapid pace of the attack — hundreds of transactions in a matter of hours — suggests some common vector of attack, but so far no link has been discovered."

Twitter user @NadavAHollander explains the exploit further:

"None of the malicious orders were executed against the new (Wyvern 2.3) contract, indicating that they were signed before the migration and are unlikely to be related to OpenSea’s migration flow."

Key Event Timeline - OpenSea Phishing Attack

Date	Event	Description
February 19th, 2022 4:10:37 PM MST	AJFromDiscord Malicious Transfer	AJFromDiscord's 8 NFTs are taken. (TBD more detail.)
February 19th, 2022 4:57:00 PM MST	AJFromDiscord Tweet	Twitter user AJFromDiscord (Alabaster Jefferson) posts that he's connected with others who also got hacked and links to a transaction which was executed. (TBD more details.)
February 19th, 2022 5:30:00 PM MST	Jon_HQ Twitter Post	Twitter user Jon_HQ makes a post which is widely cited, with the first report of a malicious transaction stealing funds. (TBD more detail).
February 19th, 2022 6:13:00 PM MST	MikeBurgersburg Analysis Tweet	Twitter user MikeBurgersburg posts a more detailed breakdown of the transaction flow and what he believes happened. (TBD more details).
February 19th, 2022 7:33:00 PM MST	Web3isGoingGreat	The incident makes the news in Web3isGoingGreat.
February 20th, 2022 7:37:00 AM MST	The Verge Article	An article is published in The Verge, indicating that $1.7m had been lost in the attack. (TBD expand with more detail.)
February 20th, 2022 12:02:00 PM	OpenSea Tweet	OpenSea posts and official tweet to community that they are investigating the situation and believe that it's a phishing attack.
February 20th, 2022 10:06:00 PM MST	Narrowed To 17 Victimes	OpenSea posts that they've narrowed down the list of affected users to just 17.

Total Amount Lost

Web3isGoingGreat originally estimated the loss at $1.7m, however later revised the estimate to $2.9m.

"Molly White, who runs the blog Web3 is Going Great, estimated the value of the stolen tokens at more than $1.7 million." "OpenSea initially said 32 users had been affected, but later revised that number to 17, saying 15 of the initial count had interacted with the attacker but not lost tokens as a result."

SlowMist estimated the loss amount at $3.4m.

A list of stolen NFTs has been published on a Google Sheet, however the list has subsequently been removed.

The total amount lost has been estimated at $3,400,000 USD.

Immediate Reactions

“I checked every transaction,” said [one] user, who goes by Neso. “They all have valid signatures from the people who lost NFTs so anyone claiming they didn’t get phished but lost NFTs is sadly wrong.”

"OpenSea co-founder and CEO Devin Finzer confirmed the phishing attack in a tweet." "Afterwards, Devin Finzer confirmed that this was a “phishing attack”, but it has not been possible to verify where the “phishing” occurred. The only thing that can be confirmed after investigation is that the phishing attack did not come from the inside of the OpenSea website."

On official statement was released by OpenSea at the time.

"Our leadership, engineering, and security teams are communicating with affected users to gather details. We continue to believe that this is a phishing attack that originated outside of http://opensea.io."

Ultimate Outcome

"Hackers return most of the unsold NFTs to victims." "Bizarrely, the hacker returned some of the NFTs to their original owners, and one victim inexplicably received 50 ETH ($130,000) from the attacker as well as some of his stolen NFTs back. The attacker later transferred 1,115 ETH obtained from the attack to a cryptocurrency tumbler, worth around $2.9 million."

The attacker's wallet address has been flagged on Etherscan.

Total Amount Recovered

"Hackers return most of the unsold NFTs to victims." "Bizarrely, the hacker returned some of the NFTs to their original owners, and one victim inexplicably received 50 ETH ($130,000) from the attacker as well as some of his stolen NFTs back. The attacker later transferred 1,115 ETH obtained from the attack to a cryptocurrency tumbler, worth around $2.9 million."

The total amount recovered has been estimated at $1,700,000 USD.

Ongoing Developments

"[M]any details of the attack remain unclear — particularly the method attackers used to get targets to sign the half-empty contract. Writing on Twitter shortly before 3AM ET, OpenSea CEO Devin Finzer said the attacks had not originated from OpenSea’s website, its various listing systems, or any emails from the company. The rapid pace of the attack — hundreds of transactions in a matter of hours — suggests some common vector of attack, but so far no link has been discovered."

"We're reaching out to the folks who reported this to investigate. Please continue to be vigilant when prompted with a wallet signature."

Prevention Policies

Which policies could have prevented this event from happening?