• Security researchers have found a serious flaw in the hardware wallets of Trezor.
• By means of voltage disturbances the researchers of Kraken Security Labs were able to steal the seed of the hardware wallet. However, there is a simple solution to fix the flaw.

Kraken Security Labs, the security department of the exchange of the same name, has found a serious defect in the hardware wallets of Trezor. Both the Trezor Model One and the Model T have a critical hardware vulnerability that allows hackers to steal the seed of the wallet. As Kraken researchers found out, 15 minutes of physical access to the device is sufficient to do this.

In a video, the researchers show that to steal the seed, the Trezor hardware wallet’s casing must be opened, the microcontroller removed and voltage disturbances induced to extract the encrypted seed. The hack can therefore certainly not be described as “simple”.

Nevertheless, Kraken succeeded in extracting the seed in a relatively short time, a series of words needed to restore a wallet and to access the stored cryptocurrencies. As Kraken stated, the researchers took advantage of an “inherent flaw in the microcontroller used in the Trezor Wallets”. Since this is a hardware flaw, Kraken said, it will be difficult to correct the flaw without releasing a completely new model with a new microcontroller.

The Kraken research team further explained:

This attack relies on voltage glitching to extract an encrypted seed. This initial research required some know-how and several hundred dollars of equipment, but we estimate that we (or criminals) could mass produce a consumer-friendly glitching device that could be sold for about $75.

Kraken has previously conducted a similar attack on KeepKey’s hardware wallet. In light of both researches, Kraken concluded that “these chips are not designed to store secrets. Companies like Trezor and KeepKey “should not rely on them alone to secure cryptocurrency.

Attack can be easily prevented

But there is also good news. Both Kraken and Trezor have stated via a blog post that the seed can only be stolen by means of voltage disturbances if the device is not protected by passphrase. In a detailed blog post, the Trezor team stated that the attack can be completely prevented if the user uses a strong BIP39 passphrase:

It’s important to note that this attack is viable only if the Passphrase feature does not protect the device. A strong passphrase fully mitigates the possibilities of a successful attack.

In the current episode of “Magical Crypto Friends” the former lead maintainer of Monero, Riccardo Spagni, also pointed out that the hardware flaw can easily be fixed by activating the optional “passphrase” function.

Trezor, in particular, in its current form, is very prone to glitching attacks and so use a passphrase. It does make it more cumbersome, but at least the passphrase is not stored on the device, so it is almost like a second factor of authentication.

Charlie Lee, the inventor of Litecoin, pointed out another important aspect. He emphasized the effects of using “giveaway wallets” and said:

I have seen a lot of people giving away sealed Ledger. I think that is kind of a bad idea. Because you, kind of, want to make sure to buy your Ledgers and Trezors directly from the manufacturer. You never know if it is been tampered with and you do not want to take the risks.

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