Hackers send fake "update" to steal $22 million from Bitcoin wallets

Crypto-hunting hackers have stolen more than $22 million from the users of Electrum, a popular Bitcoin wallet, in the past two years using a "Simple technique" involving fake updates, as per a ZDNet r.eport Monday.

Researchers stated the hack technique was initially observed back in December 2018 and was since used in several attacks over the next few years to swindle millions of dollars from unsuspecting Electrum users.

Relevant posts on Bitcoin forums showed hackers managed to send out "Update" notifications for the Electrum app on victim phones.

When the latter did update their apps, the funds were immediately stolen and siphoned off to wallets allegedly controlled by the hackers.

The hackers seemed to have a clear idea of how the Electrum wallet operated, the registries it used, and how security was handled.

Here's how they allegedly did it: All Electrum wallets are designed to connect to the Bitcoin through ElectrumX, a network of Electrum servers the wallet app uses to process transactions and store coins.

Electrum's open-source approach meant a malicious developer could set up their own ElectrumX gateway server.

As per the report, the hacker wallets hold over 1980 Bitcoin, valued at over $22 million at current prices.

A large amount of that can be traced back to a single incident in August, when a user reported losing over 1,400 Bitcoin to an Electrum wallet attack.

A server blacklisting system is now live on Electrum X servers to block malicious additions to their networks alongside the use of an update that prevents servers from showing HTML formatted popups to end-users.