Electrum patches flaw that let rogue servers redirect Bitcoin payments

Key points

• Electrum 4.8.3 verifies signatures on wallet-owned inputs before showing unconfirmed transactions; all earlier versions are affected.
• A user identified as Raju-K12 confirmed losing funds on 18 October after fee-bumping a server-manipulated transaction.
• Incoming transactions from external senders are still accepted without signature verification, a gap the developer says needs more work.

Bitcoin wallet Electrum has patched a high-severity flaw that let rogue servers manipulate pending transactions and redirect funds to attacker-controlled addresses, Decrypt reports. Version 4.8.3, released on 24 October, covers the fix, and every earlier version is affected.

The attack abused the wallet's trust in unconfirmed transactions. A compromised server could hide a real payment and inject a fake conflicting one with an attacker's address and zero fee, so the payment looked stuck. Because Electrum did not check signatures on such transactions, the fake appeared legitimate. When the user fee-bumped it, they signed a new valid transaction that paid the attacker instead.

Confirmed loss

Electrum developer SomberNight, who published the advisory, said some servers are carrying out the attack in the wild, citing two user reports. One user, dannydeezy, flagged suspicious server behaviour on 11 October without losing funds; a second, Raju-K12, confirmed a loss on 18 October after fee-bumping a manipulated transaction. Attackers could also grind the fake address to match the last four characters of the intended destination.

The patch verifies signatures on wallet-owned inputs before adding unconfirmed transactions to local history. Incoming transactions from external senders remain unverified, a gap SomberNight acknowledged would need further work. Electrum's open server model, where anyone can run a node, enables this class of attack; a 2018 campaign using fake update notifications drained an estimated $25m from users by 2020. Users running their own server are unaffected.

What to watch: Users are urged to update to 4.8.3 from electrum.org or Github, and those who cannot should check output addresses and amounts before signing.

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