As reported yesterday. Hackers launched a sophisticated attack targeting users of popular Web3 apps such as Zapper, SushiSwap, and Phantom, stealing approximately $484,000 in cryptocurrency funds. The attack focused on Ledger’s Connect Kit, a code library that enables connections between cryptocurrency wallets and decentralized apps.
key point
- Ledger’s Connect Kit was compromised in a malicious attack, resulting in the theft of approximately $484,000 in funds.
- The attackers used a phishing attack to gain access to a former Ledger employee’s account and inject malicious code.
- Malware was distributed when apps such as Zapper, SushiSwap, and Phantom were updated with compromised Connect Kit code.
- The malware tricked users into authorizing transactions to the attacker’s address rather than the intended app.
- Ledger has now disabled the malware and declared the Connect Kit safe to use again, but called for continued efforts in signing transactions.
Hackers were able to access a former Ledger employee’s account on the node package manager platform NPMJS through a phishing attack. From this vantage point, the attackers injected malicious code into GitHub’s Ledger Connect Kit update. When vulnerable apps were updated to a compromised Connect Kit version, malware was distributed to unwitting users’ browsers.
Today’s security incident appears to be the culmination of three separate failures at Ledger.
1. Blindly load code without locking in a specific version and checksum.
2. We do not enforce the “two-person rule” when it comes to code review and deployment.
3. We do not revoke access from former employees.— Jameson Lopp (@lopp) December 14, 2023
The malware allowed the hackers to trick users into approving transactions that would send funds to the attacker’s wallet rather than the intended app.
According to blockchain security platform Cybers, the code likely manipulates transaction data to trick users into confirming payments they don’t fully understand. For example, a user who authorized a token payment to activate an app feature may instead see the payment as authorized to the hacker’s address.
The exact techniques used require further analysis, but it is clear that the attack relied on clever social engineering to induce user error. Ledger and security experts recommend constant caution when approving cryptocurrency transactions and carefully reviewing addresses and details, even when an app appears legitimate.
It seems that after absorbing nearly half a million exploits, the hackers decided to stop working for fear of growing interest. Ledger was able to disable the malware and has now declared the Connect Kit safe for use once again.
However, the fact that these attacks easily compromised the critical infrastructure of popular apps sends a sobering warning to the Web3 community.
As the industry continues to work diligently to increase security and transparency for transactions, remembering the human element will be key.