The "Dark Skippy" method is a recently discovered vulnerability in Bitcoin hardware wallets that allows hackers to extract private keys using only two signed transactions. This attack works by embedding parts of a user’s seed words into low-entropy nonces during transaction signing. These nonces are then posted on the blockchain, where they can be analyzed using Pollard’s Kangaroo Algorithm to recover the original seed words.
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Imagine a group of master thieves planning to steal a priceless painting from a highly secure museum. They know that walking in and grabbing the painting directly would get them caught, so they devise an elaborate plan.
First, the thieves split up into smaller teams, each with a specific role. One team distracts the guards, another tampers with the security cameras, and a third sneaks into the vault. By working in these small, seemingly harmless groups, they avoid raising suspicion. This is like the Code Fragmentation stage, where malicious code is broken into small, innocent-looking pieces that, on their own, don't set off any alarms.
Next, as the thieves move through the museum, they constantly change their disguises. One moment, they’re janitors; the next, they're visitors. Their appearances keep changing, making it difficult for the security team to recognize them as a threat. This mirrors the Polymorphic Code stage, where the malicious code keeps altering its appearance each time it runs, making it hard for antivirus software to detect it based on known patterns.
Once they reach the painting, instead of carrying it out in a suspicious manner, the thieves hide it in a large crate labeled "Cleaning Supplies." The crate is then transported out of the museum without raising any alarms because it looks like a regular, harmless item. This is analogous to the Steganography stage, where the malicious code is hidden within an innocent-looking file, like an image or a document, allowing it to bypass security checks unnoticed.
As the thieves move through the museum, they have insiders who check for extra security or surveillance. If they sense something unusual, like a guard watching them too closely, they change their behavior and act like regular visitors, blending in to avoid detection. This is similar to the Anti-Debugging Techniques stage, where the malicious code checks if it's being analyzed in a debugging environment. If it detects any monitoring, it alters its behavior to avoid getting caught.
Finally, once the painting is safely outside the museum, hidden in the crate, the thieves regroup and make their escape, revealing their true intent and taking the painting to their hideout. This is like the Execution and Payload Delivery stage, where the code, having bypassed all defenses, finally executes its malicious payload, whether it's stealing data, deploying ransomware, or compromising the system.
How Dark Skippy Stealing Crypto From Wallets
The Dark Skippy Method can be adapted to steal private keys from a cryptocurrency wallet by targeting the wallet software or system processes. Here's how it could work:
1. Code Fragmentation:
Targeting the Wallet: The attacker creates a malicious payload designed to interact with or monitor the cryptocurrency wallet. This payload is fragmented into small pieces to avoid detection.
Silent Delivery: The fragmented code could be delivered through a seemingly legitimate application, update, or even embedded in a file commonly used by the wallet.
2. Polymorphic Code:
Evasion of Security: Each piece of the malicious payload is slightly altered to evade signature-based detection by security tools. This ensures the code can be installed on the target system without raising alarms.
Dynamic Reassembly: Once the fragments are on the target device, they reassemble into the full malicious code, ready to perform its attack.
3. Steganography:
Concealing the Payload: The malicious code may be hidden within non-executable files, such as images or documents, that are related to cryptocurrency transactions or wallets. When these files are opened, the hidden code is extracted and executed.
Activation: Upon extraction, the hidden code can interact with the wallet software, monitor clipboard activity (where users often copy their private keys), or scan files where private keys are stored.
4. Anti-Debugging Techniques:
Avoiding Detection: The malicious code checks if it's running in a debugging environment or on a system monitored by advanced security tools. If such conditions are detected, the code may disable itself or execute benign actions to avoid revealing its true intent.
Timing the Attack: The code waits for an opportune moment, such as when the user accesses their wallet or enters their private key, to initiate the key extraction process.
5. Execution and Payload Delivery:
Key Extraction: The malicious code actively monitors the wallet's process, intercepting the private keys when they are entered or accessed. This could involve keylogging, clipboard hijacking, or memory scraping.
Sending the Keys: Once the private keys are captured, they are encrypted and sent to the attacker's server. The attacker can then use these keys to gain unauthorized access to the victim's cryptocurrency funds.
Covering Tracks: After the keys are sent, the malicious code may erase itself or alter logs to remove any trace of its activities, making it difficult for the victim to understand how the breach occurred.
⚡ Example Scenario:
Phishing Attack: The user might receive an email or message containing a malicious attachment or link. This could appear as a wallet update or a transaction confirmation. When the user interacts with this file, the Dark Skippy Method deploys the fragmented, polymorphic code onto their system.
Monitoring: As the user opens their crypto wallet and accesses their private keys, the malicious code silently monitors the activity, intercepting the keys.
Theft: With the private keys stolen, the attacker gains full control over the victim's cryptocurrency, transferring funds to their own accounts
How It Stealing Private Keys From Hardware Wallet
A previous version of the method required the victim to post “dozens” of transactions to the blockchain. But the new “Dark Skippy” version can be performed even if the victim only posts a couple of transactions to the blockchain. In addition, the attack can be executed even if the user relies on a separate device to generate seed words.
The disclosure report was published by Lloyd Fournier, Nick Farrow and Robin Linus on Aug. 5. Fournier and Farrow are co-founders of hardware wallet manufacturer Frostsnap, while Linus is a co-developer of Bitcoin protocols ZeroSync and BitVM.
According to the report, a hardware wallet’s firmware can be programmed to embed portions of the user’s seed words into “low entropy secret nonces,” which are then used to sign transactions. The resulting signatures get posted to the blockchain when transactions are confirmed. The attacker can then scan the blockchain to find and record these signatures.
The resulting signatures contain only “public nonces,” not the portions of seed words themselves. However, the attacker can enter these public nonces into Pollard’s Kangaroo Algorithm to successfully compute the secret nonces from their public versions.
💡 Data Credit
> Cointelegraph
> The Block
> Hacken Blog
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