Electrum Patches Flaw That Let Rogue Servers Fake a Stuck Payment

Electrum, a long-running Bitcoin wallet, has shipped version 4.8.3 to fix a flaw its developers rate as high severity. Every release before 4.8.3 is affected, and the developers say at least one user lost money to it, according to the project's security advisory, published Saturday at 8:52 a.m. ET.

How the fake payment worked

Electrum wallets usually talk to public servers to see the Bitcoin network. The advisory says a malicious server could drop a user's real payment and show a different transaction in its place. That fake paid the attacker, carried invalid signatures and had a zero fee, so it looked stuck.

The attacker's address was generated to match the last four characters of the real one, which makes a quick glance less useful. A user who then used replace-by-fee to bump the fee on the "stuck" payment would sign a fresh transaction to the attacker.

The developers say some servers are doing this in the wild. They got a first report on Oct. 11, a report of lost funds on Oct. 18, tagged the fix on Oct. 23 and published binaries and the advisory on Oct. 24, per the advisory and the project's release notes. The Defiant also reported the fix and the user's loss.

What the patch changes

Version 4.8.3 checks the signatures on mempool transactions that spend the wallet's own coins. The developers note it still does not validate incoming transactions. Users who run their own server, or connect only to one they trust, were not exposed.

For anyone still on an older build, the advisory's advice is simple: check every output address and amount on the confirmation screen before signing, including on a fee bump.