Fake Electrum version 4.0 and hardware wallets

nc50lc

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Quote from: philinje on September 22, 2020, 02:07:16 PM

and it seems the transfer is "pending" and has stayed that way for nearly 12 hours. It definitely did not make it to the blockchain.

You haven't successfully created a transaction.
The "pending" in the send tab means that you've just clicked "save" or cancelled the window that pop-up after you click "pay".
That invoice is incomplete/outdated, I'd suggest you to delete it (right-click->delete).

For now pay no attention to the "send" tab's invoices, those aren't related to the blockchain, those are client-based entries.
Refer to the "history" tab instead and check if there're other entries that might be another (un)successful attempt, if there none, send it again.

o_e_l_e_o

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Is this showing up as "Pending" in the "History" tab on Electrum? If so, most likely it is just that the fee is too low.

If you go to the transaction, right click on it, and click on "View Transaction". Copy the "Transaction ID" from the top box and paste it in to this website: https://blockchair.com/

Does the transaction show up? If it does, what is the fee per vbyte?

philinje

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Quote from: o_e_l_e_o on September 16, 2020, 03:18:01 PM

Quote from: philinje on September 16, 2020, 11:53:36 AM

Quick question: how do I move the transaction via flash drive or QR code to the airgapped computer? Just not so obvious in the product. If there is a tutorial somewhere, happy to look at that.

On the watch only wallet, you input your destination address and amount normally, and hit the "pay" button. Then choose your fee and hit "send" (or "finalize" if you are using advanced preview). Once you've done that, on the new window which opens down the bottom left you will see the option to "Export" the transaction you have created. From that drop down menu, you can choose to either export it to a file to put on a USB stick and transfer to your cold wallet, or to display it as a QR code.

On the cold wallet, go to Tools -> Load transaction, and choose either from file (which will open a file explorer) or from QR code (which will activate any attached camera). You can then sign that transaction, and then reverse the steps to move the signed transaction back to your watch only wallet. Once you've loaded the signed transaction on your watch only wallet, you will be able to hit the "Broadcast" button to send it.

There's a tutorial for this on the Electrum documentation, but the screenshots are quite out of date: https://electrum.readthedocs.io/en/latest/coldstorage.html

Thanks Bob123 and oeleo. Really helpful, and totally makes sense. All the cool features in Electrum are starting to become clear.

Hate to backtrack a bit, but I did a small transfer, not using the airgapped wallet technique, and it seems the transfer is "pending" and has stayed that way for nearly 12 hours. It definitely did not make it to the blockchain. I used the known safe server recommended earlier, which worked previously with a different wallet. Just wondering if there are some known reasons for the pending state, and possible workarounds?

o_e_l_e_o

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Quote from: philinje on September 16, 2020, 11:53:36 AM

Quick question: how do I move the transaction via flash drive or QR code to the airgapped computer? Just not so obvious in the product. If there is a tutorial somewhere, happy to look at that.

On the watch only wallet, you input your destination address and amount normally, and hit the "pay" button. Then choose your fee and hit "send" (or "finalize" if you are using advanced preview). Once you've done that, on the new window which opens down the bottom left you will see the option to "Export" the transaction you have created. From that drop down menu, you can choose to either export it to a file to put on a USB stick and transfer to your cold wallet, or to display it as a QR code.

On the cold wallet, go to Tools -> Load transaction, and choose either from file (which will open a file explorer) or from QR code (which will activate any attached camera). You can then sign that transaction, and then reverse the steps to move the signed transaction back to your watch only wallet. Once you've loaded the signed transaction on your watch only wallet, you will be able to hit the "Broadcast" button to send it.

There's a tutorial for this on the Electrum documentation, but the screenshots are quite out of date: https://electrum.readthedocs.io/en/latest/coldstorage.html

bob123

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Quote from: philinje on September 16, 2020, 11:53:36 AM

Thanks for this guidance. Quick question: how do I move the transaction via flash drive or QR code to the airgapped computer?

You need to export/save the transaction instead of broadcasting it.
Then simply move that transaction (saved to file) via USB or scan it with a camera (QR).
On the other device, load the transaction via electrum, then sign/broadcast it.

philinje

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Quote from: o_e_l_e_o on September 09, 2020, 01:58:31 PM

Quote from: philinje on September 09, 2020, 01:36:07 PM

I am just paranoid because I previously made a connection to a bad server, and there is a lot of btc in this wallet. Just need to be extra sure. I haven't used Electrum a lot and now I understand a lot better how it works.

If you want extra peace of mind, then the thing to do is to set up an airgapped Electrum wallet.

Essentially, you take an old computer or laptop and ensure that it will never connect to the internet again - remove the WiFi card, the ethernet adapter, and so on. Create an Electrum wallet on it and back your seed phrase in the usual way. Then export the master public key (xpub) from that airgapped wallet, transfer it on a flash drive or scan it as a QR code to your main internet-connected computer, and use it to set up what is called a "watch only" wallet in Electrum.

This watch only wallet on your main computer will only be able to view your addresses and coins, but will not be able to spend anything, even if you download malware, a fake wallet, or your computer is physically accessed. To make a transaction, you use the watch only wallet to generate the transaction, move it via flash drive or QR code to your airgapped computer to be signed, and then move it back again to your main computer to be broadcast.

Thanks for this guidance. Quick question: how do I move the transaction via flash drive or QR code to the airgapped computer? Just not so obvious in the product. If there is a tutorial somewhere, happy to look at that.

DaveF

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Quote from: bob123 on September 11, 2020, 09:49:39 AM

Quote from: DaveF on September 11, 2020, 08:54:50 AM

The authentic 3.1.1 did, so unless they went even older then that when creating the malware, they either cut the hardware wallet support out or just broke it by accident.

My guess would be that they simply took that part out of the code.
The malicious version creates and broadcasts a transaction as soon as possible. It wouldn't work with a hardware wallet, so i guess they simply ignored that and removed that part.

Just a guess tho.

Agreed, it was just more of a test / answer to the OPs question.
Also, as I noted mine was a sample size of one. No idea if there are more versions of the malware out there and what other capabilities they have.

And there is also the thread that witcher_sense started here: https://bitcointalksearch.org/topic/a-ransom-attack-on-trezors-and-keepkeys-passphrase-handling-5273132

Stay safe.

-Dave

bob123

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Quote from: DaveF on September 11, 2020, 08:54:50 AM

The authentic 3.1.1 did, so unless they went even older then that when creating the malware, they either cut the hardware wallet support out or just broke it by accident.

My guess would be that they simply took that part out of the code.
The malicious version creates and broadcasts a transaction as soon as possible. It wouldn't work with a hardware wallet, so i guess they simply ignored that and removed that part.

Just a guess tho.

DaveF

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Quote from: pooya87 on September 10, 2020, 10:26:26 PM

Quote from: DaveF on September 10, 2020, 06:29:12 PM

...
-Dave

usually people who are so reckless about their security (that is ignoring the most important step of all, verifying the signature of the wallet installer they download) they are reckless overall. using a multisig won't help them much either because they may as well update those clients recklessly too or even ignore looking at the transaction they are signing and still send the coins to the scammer!

True.

Anyway back to the thread I installed the malware on a another laptop that I am wiping now and it did not see an old trzeor.
The authentic 3.1.1 did, so unless they went even older then that when creating the malware, they either cut the hardware wallet support out or just broke it by accident.

This is just with the 1 version of the bad software that I had, I do not know if there are more versions out there that are different.

-Dave

pooya87

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Quote from: DaveF on September 10, 2020, 06:29:12 PM

Or, you can also setup multisig.

https://en.bitcoin.it/wiki/Multisignature

This way even if you download malware you would have to do it in more then 1 location.
If you are even more paranoid you can use 3 different types of devices. PC, iPhone, Android phone and then setup 3 of 3 required to sign.

You would have to download 3 pieces of malware to actually loose your BTC.

-Dave

usually people who are so reckless about their security (that is ignoring the most important step of all, verifying the signature of the wallet installer they download) they are reckless overall. using a multisig won't help them much either because they may as well update those clients recklessly too or even ignore looking at the transaction they are signing and still send the coins to the scammer!

DaveF

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Or, you can also setup multisig.

https://en.bitcoin.it/wiki/Multisignature

This way even if you download malware you would have to do it in more then 1 location.
If you are even more paranoid you can use 3 different types of devices. PC, iPhone, Android phone and then setup 3 of 3 required to sign.

You would have to download 3 pieces of malware to actually loose your BTC.

-Dave

bob123

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Quote from: philinje on September 09, 2020, 01:36:07 PM

I am just paranoid because I previously made a connection to a bad server, and there is a lot of btc in this wallet.

Connecting to a bad server doesn't harm you. Installing malware without verify the signature does.

If you have a lot of BTC, you actually should either get a hardware wallet, or use a cold storage setup (as described by o_e_l_e_o).
I'd not recommend to use a desktop wallet to store an amount of BTC you definitely do not want to lose.

If you are transacting very often, get a hardware wallet (~70$). If not, a cold storage setup would be even better.

o_e_l_e_o

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Quote from: philinje on September 09, 2020, 01:36:07 PM

I am just paranoid because I previously made a connection to a bad server, and there is a lot of btc in this wallet. Just need to be extra sure. I haven't used Electrum a lot and now I understand a lot better how it works.

If you want extra peace of mind, then the thing to do is to set up an airgapped Electrum wallet.

Essentially, you take an old computer or laptop and ensure that it will never connect to the internet again - remove the WiFi card, the ethernet adapter, and so on. Create an Electrum wallet on it and back your seed phrase in the usual way. Then export the master public key (xpub) from that airgapped wallet, transfer it on a flash drive or scan it as a QR code to your main internet-connected computer, and use it to set up what is called a "watch only" wallet in Electrum.

This watch only wallet on your main computer will only be able to view your addresses and coins, but will not be able to spend anything, even if you download malware, a fake wallet, or your computer is physically accessed. To make a transaction, you use the watch only wallet to generate the transaction, move it via flash drive or QR code to your airgapped computer to be signed, and then move it back again to your main computer to be broadcast.

philinje

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Quote from: nc50lc on September 08, 2020, 10:30:46 PM

Quote from: philinje on September 08, 2020, 05:27:08 PM

-snip-

You said your last Electrum version "was" 3.3.2, so have you upgraded to the latest version?
If yes, don't sweat the server selection, bad servers can only block your transaction broadcast at worst, the message will be a generic error msg.
If you want, you can use electrum.blockstream.info:50002 as server, that is 100% surely isn't a phishing server but I can't vouch for the privacy part.

Thanks again. Yes, I verified the 4.0.2 build and installed it. I am just paranoid because I previously made a connection to a bad server, and there is a lot of btc in this wallet. Just need to be extra sure. I haven't used Electrum a lot and now I understand a lot better how it works.

This is a great community and a great product. It's too bad this phishing exploit caused some bad press and paranoia. Anyway, I will do my best to promote the product!

HCP

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Quote from: philinje on September 08, 2020, 05:27:08 PM

I'm going to assume the ones with domains that start with electrumx are more recent.

That is an incorrect assumption to make... they can literally be called almost anything, it is simply a choice made by the admin of the server what name is used... "electrumx" is simply the default name for ElectrumX based servers. Additionally, I would suspect that the "bad servers" were actually running a modified version of ElectrumX...

As nc50lc has pointed out... the "bad servers" can't actually steal your coins. All they can do is show a fake error message... and even that problem is mitigated by using newer versions of Electrum. To actually lose coins, you would need to download and install a fake version of Electrum that immediately sends your balance when you start it up... and that issue can be mitigated by only downloading from electrum.org and always verifying the digital signature of the download before running/installing Electrum.

nc50lc

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Quote from: philinje on September 08, 2020, 05:27:08 PM

-snip-

You said your last Electrum version "was" 3.3.2, so have you upgraded to the latest version?
If yes, don't sweat the server selection, bad servers can only block your transaction broadcast at worst, the message will be a generic error msg.
If you want, you can use electrum.blockstream.info:50002 as server, that is 100% surely isn't a phishing server but I can't vouch for the privacy part.

philinje

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Quote from: HCP on September 07, 2020, 03:38:27 PM

Quote from: philinje on September 07, 2020, 01:59:31 PM

...One further question: how do I find a list of good servers and then manually connect to one (is there a setting for this)?

AFAIK, there isn't really a list of "trusted" servers...

I would guess that all you can do is let Electrum find any server, try your transaction and if it goes through OK without giving you the "unknown" error, then you can add that particular server to your own personal list of "trusted" servers that you want to connect to... and then manually connect to one from your list.

Thanks again. I figured out I can open Network under Tools, and there is a list of 10 servers I am connected to. Beneath that there is a list of other known servers. I'm going to assume the ones with domains that start with electrumx are more recent. Of the servers I am connected to, there are two that start with electrumx: electrumx.erbium.eu:50002 and electrumx.[Suspicious link removed]:50002

If I right-click one of those, I get the "use as server" option. Would you know if either or both of the servers above are safe?

Does the list of 10 servers I am connected to change randomly with every transaction, as long as I check "Select server automatically"?

DaveF

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Quote from: pooya87 on September 07, 2020, 10:30:12 PM

Quote from: DaveF on September 07, 2020, 09:19:36 AM

~
So I finally got a copy of one of the bad versions on a machine I was going to DBAN anyway to check, and it would not even recognize my old ColdCard at all.
Plugged it into a legit machine and it was there so I know it was not the hardware wallet. So whoever is writing the malware either broke the HW wallet compatibility or just did not bother putting it in.

-Dave

have you tried your ColdCard on an old (real) Electrum version such as <3.2.3 because i believe that the malicious version was forked from one of those earlier versions and may not have been updated. and there were some bugs in some of those earlier versions that are fixed in new ones. for instance Coldcard from Coinkite was not even supported in Electrum.

Quote from: o_e_l_e_o on September 07, 2020, 10:16:32 AM

Quote from: DaveF on September 07, 2020, 09:19:36 AM

-snip-

That's interesting. Do you have any other hardware wallets on hand you could try it with? Presumably the attacker figured it wasn't worth their time to keep up to date with support for hardware wallets, since the majority of hardware wallet users would reject a transaction they didn't generate trying to sweep all their coins to an unknown address (at least, you would hope so).

The machine in question has already been wiped. It was actually wiped before I even posted here.
I did not check a version prior to 3.2.3 I have just been using whatever is / was current. Did not know that the malware version was based on code that was 2 years old.

I have an old trezor that I can check against it. Should have another machine or 2 that will need to be wiped in a few days or early next week at the latest.

-Dave

pooya87

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Quote from: DaveF on September 07, 2020, 09:19:36 AM

~
So I finally got a copy of one of the bad versions on a machine I was going to DBAN anyway to check, and it would not even recognize my old ColdCard at all.
Plugged it into a legit machine and it was there so I know it was not the hardware wallet. So whoever is writing the malware either broke the HW wallet compatibility or just did not bother putting it in.

-Dave

have you tried your ColdCard on an old (real) Electrum version such as <3.2.3 because i believe that the malicious version was forked from one of those earlier versions and may not have been updated. and there were some bugs in some of those earlier versions that are fixed in new ones. for instance Coldcard from Coinkite was not even supported in Electrum.

HCP

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Quote from: philinje on September 07, 2020, 01:59:31 PM

...One further question: how do I find a list of good servers and then manually connect to one (is there a setting for this)?

AFAIK, there isn't really a list of "trusted" servers...

I would guess that all you can do is let Electrum find any server, try your transaction and if it goes through OK without giving you the "unknown" error, then you can add that particular server to your own personal list of "trusted" servers that you want to connect to... and then manually connect to one from your list.

Topic: Fake Electrum version 4.0 and hardware wallets (Read 741 times)