SECURITY

Ledger Receive Address Attack

https://www.docdroid.net/Jug5LX3/ledger-receive-address-attack.pdf

Overview
Crypto wallets consist of a private key for spending funds, and a public key for receiving funds.
Modern Crypto clients usually create a new receive address after every transaction.
This is done to better protect the privacy of the user, by spreading his funds across multiple addresses,
rather than one.
Receive addresses are normally generated automatically and are transparent to the wallet owner.
The Attack
Ledger wallets generates the displayed receive address using JavaScript code running on the host
machine.
This means that a malware can simply replace the code responsible for generating the receive address
with its own address, causing all future deposits to be sent to the attacker.
Because receive addresses are consistently changing as part of the usual activity of the wallet, the user
has no trivial way (like recognizing his address) to verify the integrity of the receive address.
As far as he knows, the displayed receive address is his actual receive address.
What Makes This Even Worse
- All the ledger wallet software is located in the AppData folder, meaning that even an
unprivileged malware can modify them (no need to gain administrative rights).
- The ledger wallet doesnt implement any integrity-check/anti-tampering to its source files,
meaning they can be modified by anyone.
- All the malware needs to do is replace one line of code in the ledger software, this can be
achieved with less than 10 lines of python code.
- New ledger users would typically send all their funds to the wallet once initialized.
If the machine was pre-infected, this first transaction may be compromised causing the user to
lose all of his funds.
- The attack changes the receive address during its generation, causing even the automatically
generated QR to be updated to the attackers address. Meaning that both the string and QR
representations of the address are compromised.
Proof of Concept
Open the file:
C:\Users\%USERNAME%\AppData\Local\Google\Chrome\User
Data\Default\Extensions\%EXTENSION_ID%\%EXTENSION_VERSION%\src\wallet\wallet.js
Replace the line:
return (_ref = this.wallet.cache) != null ? _ref.get(this.getCurrentPublicAddressPath()) : void 0;
With:
return MY_MALICIOUS_ADDRESS;
The next time you receive funds, all the funds will be sent to MY_MALICIOUS_ADDRESS.
Mitigation
Un undocumented feature, that isnt even part of the official Receiving BTC to your Ledger article, can
in some cases help verify the integrity of the receive address.
On the bottom right part of the receive screen, a small monitor button exists. Pressing this button will
cause the receive address to show up on the hardware wallets screen.
This can be used to verify that the address is valid and has not been tampered.
Note that this process is not part of the default receive process, and is not enforced by the wallet.
A proper solution would be to enforce the user to validate the receive address before every receive
transaction, just like the wallet enforces the user to approve every send transaction.
Also, this undocumented feature only exists in the Bitcoin App.
The Ethereum App (and possibly other apps as well) has no mitigation, the user has no way to validate if
the receive address has been tampered.
Advice for Existing Ledger Customers
If youre using the Bitcoin App Before every receive transaction validate the integrity of the address
using the monitor button.
If youre using the Ethereum App Treat the ledger hardware wallet the same as any other software-
based wallet, and use it only on a Live CD operating system that is guaranteed to be malware-free. At
least until this issue receives some kind of fix.
Responsible Disclosure
Unfortunately, Ledger doesnt have an organized vulnerability disclosure program.
Nonetheless we contacted the CEO and CTO of Ledger directly in order to privately disclose and fix the
issue. Weve received a single reply, asking to hand over the attack details. Since then all our mails have
been ignored for 3 weeks, finally receiving an answer that they wont issue any fix/change.
Timeline:
4, January, 2018 First contact with general information.
4, January, 2018 CTO of Ledger requested the full details of the vulnerability.
4, January, 2018 Full Details were sent.
10, January, 2018 Weve requested an update, no response.
13, January, 2018 Again, weve requested an update, not response.
27, January, 2018 CTO of Ledger replies that no fix/change would be done (our recommendation to
enforce the user to validate the receive address has been rejected), but they will work on raising public
awareness so that users can protect themselves from such attacks.

http://cryptorus.info/ledger-addresses-man-in-the-middle-attack-that-threatens-millions-of-hardware-wallets/