Overview
- Attackers have exploited predictable recovery phrases to steal at least $5 million, with a coordinated campaign that drained 431 wallets for about $3.1 million during the May 27 attacks and follow-up transfers that moved roughly $2 million.
- The root cause is weak random-number generation used when creating seed or recovery phrases in certain software, mainly lesser-known mobile wallets, which makes mnemonic phrases easier to guess.
- Coinspect’s analysis shows the weakness dates back to 2018 and that vulnerable wallets were still being created in recent weeks, increasing the pool of at-risk addresses across chains.
- Multiple networks are affected, including Bitcoin, Ethereum, Polygon, Tron, Solana and Rootstock, while hardware wallets and most major wallet providers appear unaffected based on current evidence.
- Coinspect has released a free address-check tool, urged developers to add weak-mnemonic detection, and advised users to check old addresses and move funds to freshly created wallets or hardware devices to reduce further losses.