Ledger confirms spy chip implant behind wallet crypto thefts

No matter whether you like or hate or don't care about cryptocurrencies, this is incredible stuff...

Now basically: every single attack that's been described as "theoretical" or "far-fetched" or "only existing in the mind of a paranoid person" did actually happen.

We're talking here about a tiny eSIM implant and a little CPU doing OCR on the fonts appearing on the hardware wallet's screen to read the secrets during set up. So the secure element ain't tampered with.

Not long ago the Coldcard hardware wallet had an issue where it'd fallback to a 32-bit only RNG that could be cracked and so many people got their coins stolen.

Now it's Ledger that sees tampered devices all around the world (in Asia for sure but now there are reports about reseller in the EU selling backdoored/eSIM'ed devices).

For people who own Bitcoin at this point one of the only thing kinda sensible to do is to use multisig schemes, like 2-of-2 or 3-of-3 multisig, where your split the secret over two or three different hardware wallet brands (meaning being able to sign a 2-of-2 wallets requires hardware wallets from two different vendors).

When Ledger hardware wallets came out and people said that seed (the list of words) could be intercepted and relayed by a channel bypassing the computer (here by using an eSIM), people would post explaining that people were nuts if they thought such an attack could be pulled off.

Yet here we are.

And Ledger is responsible for very poor security practices: for example it's impossible to use a Ledger hardware wallet in a fully airgapped/offline way. For you're forced to not only upgrade the firmware but also install the Bitcoin "ledger app" (or whatever that is called) after you entered your seed into the device.

Which is complete and total amateur hour.

In addition to that Ledger offers a service to "backup your seed": what could possibly go wrong with that uh?

I'm betting that we'll soon hear about hardware wallets getting drained due to the seed being exfiltrated through "randomness" in how transactions are built/signed (aka "kleptography").

And it's not just representative about people in the cryptocurrencies ecosystem: people simply don't understand computer security and don't understand the potential attacks nor the length at which attackers are willing to go to steal data/funds/ruin other people's lives.

At this point we've heard about chips' plans being modified before the chips are even built (only to lower the entropy of RNGs) [unrelated to cryptocurrencies btw], a worldwide backdoor attempt in SSH, eSIM sending secrets from hardware wallets with tiny attack surfaces.

You're not anywhere near paranoid enough.

Not mentioned in article: MediaMarkt, the German equivalent of Best Buy, was selling these compromised devices on store shelves in every city in Germany.

The technique is so coool. I mean taping the screen output on the way to the display to get around having to hack the secure element. :)

Hardware wallets are not a solution to self-custody.

If one would make a list of things that can go wrong, starting from the supply chain that delivers parts to the manufacturer, malicious employees at the manufacturer, mistakes the manufacturer can make, attacks on the delivery chain from the manufacturer to the user, to mistakes the user can make creating, using and storing their keys - the list would contain hundreds of points.

The link you want:

https://grandideastudio.com/portfolio/security/ledger-hardwa...

They should have posted the weight with and without the device in it.

Also: never leave empty space in a hardware key, pot the whole thing in epoxy.

These guys had the audacity to slap a label on their box: "See how there's no security sticker? That's because our hardware is soooo secure"

Everyone at ledger has made absolute fools out of themselves.

Exhibit #9387434 for reasons to stay out of crypto.

Man, I wish there were some pictures. I didn’t even know that there are LTE modems that small.

Funny enough, EEVBlog posted a teardown video of one of those things today. https://www.youtube.com/watch?v=8JnHdr30v4g

This whole operation smells Israeli from the beginning to the end. First are these USB ledgers with modified hardware (guess who likes to do that on pagers and similar), then this happens in Germany, the country that never says "no" to the same specific group of people and finally they try exfiltrate the stolen funds with the favorite "private" coin of the same group of people, which in end is (again) proven to NOT be private at all.https://x.com/YFarmX/status/2108918564015006200

HN will never permit to look into the origin of this criminal action and normies will not even put that possibility on the table because they've been programmed against it. Let's play a game, this is a serious criminal act. I bet this will be quickly forgoten in about 3 weeks without anyone in Germany pointing fingers to the guilty party.

I wonder the lengths smartphone vendors are going to prevent this kind of attack. I cannot imagine it is easy to completely validate hardware in such an elaborate supply chain. I shudder to think about the attack surface in something like a modern car.

My gut reaction is that a hardware implant would be too costly so there's no way they'd actually do that but I guess when you can steal $92M, anything is possible. They could even fab an esoteric chip and still make a profit.

I'm guessing the best way to go about self custody these days is to have a multi sig wallet, based on multiple hardware wallets from different vendors.

One would've thought that the display data bus would be encrypted/scrambled in such a device, or at least packaged in a way that makes this kind of attack destructive to the circuit board (chip-on-glass).

Amateur hour all around.

I wonder if a epoxy/resin potting would solve this sort of attack. Or active tamper response that fries the board if someone tampers with the case.

Why are these things not potted in epoxy at the factory? Not that it would entirely prevent this attack but it could make it a lot harder to execute and hide.

I can guarantee that if this was open-source, someone or some system would’ve picked it up. I’m still amazed that one guy picked up the XZ Utils backdoor because it slowed down after an update.

TBH, this just sounds to me like the crypto industry is discovering, yet again, why the banking and credit card industry have all this red tape and supply chain security.

Like sure, they're not fully immune... But at least I can call my bank and show them that I didn't suddenly fly from New Mexico to Florida to buy $200 in gift cards from a gas station in the middle of nowhere.

Crypto MUST deal with fraud and hacking if they want to become reliable. At that point, they'll just become another bank with a casino attached.

Not your factory, distributor, warehouses, fulfillment centers and entire supply chain, not your coins.

Ledger has had three data leak incidents: once in 2020, a software supply chain attack in 2023 and another data leak in 2026. This latest one is the fourth.

Even if one were to ignore the latest incident, which arguably isn't their fault, the first three incidents make up a pretty bad security track record.

How a French (EU based) company is still in business after all of this, is an indicator of selective enforcement of EU privacy laws (GDPR, etc).

I wonder why they only managed to steal 100M so far. Like with the order of effort needed, why haven't they waited for the really big fish to unlock their ledger?

I hope they refer the exploit as "legerdemain"

Makes the claim from BI that Supermicro had malicious hardware implants a little more believable, eh?

Reminds me of that time when state actors wanted to spread the Stuxnet worm into an air gapped nucleair facility in Iran, and basically hijacked the whole USB supply chain and put the worm in there.

When enough resources / money is involved, these things are to be expected.

Here’s a new market for $500 Faraday Cages, if any HN readers are interested in selling that

How did the attackers acquire valid, active Vodafone eSIMs without doxxing themselves?

What a f-ing nightmare. It's stuff like this where I start to understand Apple's stance on right to repair. How do you maintain hardware security without strict provenance over every component in your device?

Amazing, at least we have hackers stepping up to do the work the government refuses to.

Can see why hardware wallets seemed a good idea at the time but history has shown this is a terrible way to self custody. Compromised devices aside, the KYC data leaks have put people in danger too.

LOL why would anyone want a hardware wallet when you can just store your Bitcoins on your own encrypted hard disk or USB stick? Bitcoin is merely a file.

These people are being suckered into a false sense of security with hardware cryptowallets. I mean, it would be very tempting to sell a hardware wallet with a backdoor inside of it to steal everyone's cryptocurrency, wouldn't it?

"Because whoever can read the screen wins." This is a bit surprising from Heise.de?

I bought from this very reseller in the last 90 days and I just opened my Stax with a knife to find out it was implanted. It is a very good job too, if I didn't watch the Youtube video, I would think it's part of the original Ledger hardware.

So HW passkeys in general can also be compromised?

It's always fascinating to me to poke my head into the crypto ecosystem because so many problems people are encountering in it are just... solved in fiat-currency ecosystems.

Nothing like the monopoly on violence to severely discourage bad actors from executing something like this.

Why would they put all this effort in protecting the key within the chip and then go ahead and leak it via the screen?

Funny how all the rules of capitalism break down as you approach really big sums of money.

Couldn't they trace the thief through the eSIM?

Why are theee no legal repurcussions to this?

It's a skimmer?

Looks like government's work to me. Why would someone risk a prison for this.

I already commented the other day on this exploit but really it's fascinating.

I don't care about cryptocurrencies but I've always been fascinated by the cryptography behind it. I've also dabbled with hardware wallets for non-cryptocurrencies stuff: like U2F auth.

The idea of a master secret that is behind a secure element which I control and which I can duplicate is amazing to me (as opposed to, say, "your" passkeys which Google/Microsoft/Apple can basically backup and transfer to other devices for you).

But really to me in the cryptocurrencies world people have been sold the lie that a hardware wallet was secure: it's not. It could be tampered with (as happened in this hack, where an additional rogue chip reading the screen and then sending it using an eSIM steals the secret) but it can also contain a bug (like the recent Coldcard exploit where Coldcard hardware wallets fell back on a RNG with only 32 bits of entropy and some dark-hat hacker cracked those and stole Bitcoins) and, most of all, the vendor of the hardware wallet itself can do nasty attacks (like "kleptography").

From the very start everybody in the ecosystem should have pushed of "n-of-n" schemes (say even just 2-of-2), where one secret goes on a hardware wallet from one vendor and the other secret goes on a hardware wallet from another vendor.

For years and years the tune has been: "PCs cannot be trusted, use a hardware wallet" but it mislead people.

PCs indeed cannot be trusted but unsuspecting users should have learned how to use 2-of-2 or 3-of-3 schemes, to become immune from hacks affecting one hardware wallet vendor.

The typical, non-sensical, response to this is the idiotic: "but if you have two secrets, if you lose one of them you lose everything". It's totally idiotic for people basically save a list of 24 words (the "seed", which is the master secret). Well, guess what: instead of saving a list of 24 words, you save a list of 48 words. Exact same thing, just twice longer.

That's my take: the entire "your coins will be safe if you use a hardware wallet" was misguided.

The tweet doesn't say that ledger installed the chip.

This is some D grade trash writing.

Back to paper wallets I guess.

+15 years later and it still doesn't do anything but provide idiots a way to lose their money. It really is impressive.

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finally, good use for eSIMs /s But damn, it's hard problem to fix. Put it in epoxy and while tampering is harder (not impossible! also can just replace whole module), you can't verify it

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Crypto is a gift to scammers: billions stolen, victims left with little recourse, and no effective government oversight.

If you lie down with dogs, you will get up with fleas.

Dogs = cryptocurrencies. Fleas = scammed.

What is the use case of a hardware cryptocurrency wallet besides trapping bitcoins in the Shadow Realm?

Oh-Kay_Labs have said it for years. Not only hackers and thieves go for them, but also kidnappers and robbers. If anyone knows you have one, and things could be much worse. Use paper-wallets, old phones and encrypted USBs instead.

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