Cryptocurrency wallet BitGo has patched a critical vulnerability that could have exposed the private keys of retail and institutional users.
The cryptography research team Fireblocks discovered the vulnerability and notified the BitGo team in December 2022. The vulnerability is related to the BitGo Threshold Signature Scheme (TSS) wallet, potentially exposing the private keys of exchanges, banks, businesses, and users of the platform.
The Fireblocks team named the vulnerability the BitGo Zero Proof Vulnerability, which allows potential attackers to extract private keys in under a minute using a small amount of JavaScript code. BitGo suspended the vulnerable service on December 10 and issued a patch in February 2023, requiring clients to update to the latest version by March 17. The Fireblocks team outlined how it identified vulnerabilities using free BitGo accounts on mainnet. Part of the mandatory zero-knowledge proofs missing from BitGo's ECDSA TSS wallet protocol allowed the team to expose private keys through a simple attack.
Industry-standard enterprise-grade cryptoasset platforms utilize multi-party computation (MPC/TSS) or multi-signature technology to eliminate the possibility of a single point of attack. This is done by distributing private keys among multiple parties to ensure security controls should one party be compromised. Fireblocks was able to demonstrate two possible ways that an internal or external attacker could gain access to the full private key.
Infected client users can initiate transactions to obtain some of the private keys held in the BitGo system. BitGo will then perform signature calculations before sharing information that leaks BitGo key fragments. "An attacker can now reconstruct the full private key, load it into an external wallet, and withdraw funds immediately or at a later time."
The second case is considered an attack if BitGo is compromised. An attacker would wait for a client to initiate a transaction before replying with a malicious value. This is then used to sign transactions with the client's key shard. An attacker can use the response to reveal the user's key shard, which can then be combined with BitGo's key shard to take control of the wallet.
Fireblocks noted that the identified vectors have not yet carried out any attacks, but warned users to consider creating new wallets and transferring funds from ECDSA TSS BitGo wallets before installing the patch. Hacking wallets has become commonplace across the cryptocurrency industry in recent years. In August 2022, over $8 million was lost from over 7,000 Solana-based Slope wallets. Algorand web wallet service MyAlgo was also the target of a wallet hack, resulting in the loss of more than $9 million from various high-profile wallets.
