Electrum bug let rogue servers steal bitcoin via fake fee bumps

A flaw in Electrum, one of Bitcoin's oldest software wallets, let malicious servers trick users into signing payments to attackers when they tried to speed up transactions using Replace-by-Fee. Because Electrum relies on outside servers to report pending transactions without verifying their signatures, an attacker could substitute a fake transaction spending the user's coins to an attacker-controlled address — made to look stuck with no fee and a destination address matching the last four characters of the legitimate one — and the wallet would then sign a valid replacement once the user raised the fee.

• Developers received two reports in October, including one user who lost bitcoin; the amount stolen and the malicious servers were not disclosed.
• Electrum 4.8.3, released Oct. 24, adds signature verification for unconfirmed transactions spending coins from the user's own wallet, though earlier versions remain vulnerable when connected to malicious servers.
• Users connected only to trusted servers, including their own, were not exposed; the fix shipped six days after the first reported theft.