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JANUARY 2022

GLOBAL

TREZOR

DESCRIPTION OF EVENTS

"The safe place for your coins." "Store your coins with Trezor." "Hardware wallet is the safest way to manage & trade your cryptocurrencies."

 

"In 2018, Reich along with a friend decided to spend $50,000 worth of Bitcoin on Theta tokens, which were valued at just 21 cents back then." "Initially, the tokens were held on a China-based exchange but within weeks after a broad crackdown on cryptocurrency by the Chinese government, they had to transfer everything to a hardware wallet."

 

"When an investor named Dan Reich wanted to withdraw his $50,000 Theta (THETA) investment from his wallet in 2018, he realized that he forgot the password of his Trezor One wallet at that exact time." "After deciding to cash out an original investment of roughly $50,000 in Theta in 2018, Dan Reich, an NYC-based entrepreneur, and his friend realized that they had lost the security PIN to the Trezor One on which the tokens were stored. After unsuccessfully trying to guess the security PIN 12 times, they decided to quit before the wallet automatically wiped itself after 16 incorrect guesses." "The user who entered the security password incorrectly 12 times stopped without the 16th incorrect entry. 16. Incorrect password entry, all assets are automatically deleted. However, the investment rose to $2 million over time, and Reich reached out to Kingpin on this issue."

 

"Hacker Joe Grand, who lives in Portland and is also known as “Kingpin”, actually revealed everything with a YouTube video." "Joe explained he was able to access the PIN needed to get into the funds by using the fault injection attack- which changes the security of the microchips in the hardware to read the RAM."

 

"I was contacted to hack a Trezor One hardware wallet and recover $2 million worth of cryptocurrency (in the form of THETA). Knowing that existing research was already out there for this device, it seemed like it would be a slam dunk. Little did I realize the project would turn into a roller coaster ride with over three months of experimentation, failures, successes, and heart-stopping moments. It reminded me that hacking is always unpredictable, exciting, and educational, no matter how long you've been doing it. In this case, the stakes were higher than normal: I only had one chance to get it right."

 

"The key to this hack was that during a firmware update, the Trezor One wallets temporarily move the PIN and key to RAM, only to later move them back to flash once the firmware is installed. Grand found that in the version of firmware installed on Reich’s wallet, this information was not moved but copied to the RAM, which means that if the hack fails and the RAM is erased, the information about the PIN and key would still be stored in flash."

 

"Kingpin managed to find the password after 12 weeks of work. In fact, the key to this hack was the software replacement of Trezor One. Grand noticed that a Trezor One software update had begun saving the PIN and keyword to the Trezor One’s RAM drive. Using what was then known as a fault injection attack, the hacker hacked the RAM drive and displayed the password there."

 

"We are basically causing misbehavior on the silicon chip inside the device in order to defeat security." "After using a fault injection attack — a technique that alters the voltage going to the chip — Grand was able to surpass the security the microcontrollers have to prevent hackers from reading RAM, and obtained the PIN needed to access the wallet and the funds." "And what ended up happening is that I was sitting here watching the computer screen and saw that I was able to defeat the security, the private information, the recovery seed, and the pin that I was going after popped up on the screen."

 

"According to a recent tweet from Trezor, this vulnerability, which allows the pin to be read from the wallet’s RAM, is an older one that has already been fixed for newer devices." "Trezor, in a tweet, noted that this could only be possible for older ones of the hardware since it has been fixed in newer devices." "But unless drastic changes are introduced to the microcontroller, the fault injection attacks will still be posing a threat"

 

"Hi, we just want to add that the vulnerability was already fixed, and all new devices are shipped with a fixed bootloader. Thanks to @saleemrash1d for his security audit."

 

"Hi, this is an outdated exploit that is not a concern for current users and that we fixed in 2017, right after a report we received through our responsible disclosure program. The attack requires physical access to the device & there is no record of any funds being compromised."

 

"[T]he vulnerability was fixed by following a firmware update. If your device is updated to firmware 1.8.0 or higher, you are not affected. We suggest always updating Trezor to the latest version (you can check your current FW version in the devices settings section)."

Early model Trezor hardware wallets were vulnerable to a fault injection attack, since they would put the PIN and key into RAM during the firmware update process. These wallets could be exploited if an adversary gained physical access to the wallet, since they could potentially trigger a firmware update and read the private key off the RAM. This was used to recover $2m worth of funds for a user who forgot their password to access their funds.

HOW COULD THIS HAVE BEEN PREVENTED?

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.)

 

Check Our Framework For Safe Secure Exchange Platforms

Sources And Further Reading

 For questions or enquiries, email info@quadrigainitiative.com.

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