Electrohunt Part 1: Hunting for the phishing campaigns on the Electrum network

Users of the Electrum Wallet, a popular desktop Bitcoin client, have been under a persistent attack since December of 2018. According to Cointelegraph, it resulted in a million dollar loss worth of crypto in just its first few hours.

The sheer size and impact of the attack got me interested in learning more about it. Most of the discussion in the news has been focused on the vulnerability in the Electrum Wallet software which allowed arbitrary phishing messages to be displayed. The Electrum Wallet software is unique as it relies on a separate distributed network of specialized servers acting as gateways to the Bitcoin network. As I have discovered, it is that supporting network of Electrum servers which is under a constant attack by bad actors which can lead to even greater impact on the users than the current phishing campaign.

In this blog post, I will share my research into how the attackers have exploited the trust model in the Electrum network and flooded it with malicious servers. I will also share the story of my hunt to discover two ongoing phishing campaigns, reveal details about the attackers’ infrastructure, and their unique methodology to backdoor Electrum Wallets.

The Phishing Attack

The client phishing attack has been covered by a number of sources listed in the reference section below so I will only cover technical details relevant to the exploration of the networking portion. Electrum Wallets prior to version 3.3.3 had a unique feature where error messages sent by the server would be displayed in a pop up dialog. The original intent was likely to inform users of the reason for their transactions not going through. However, exposing users to arbitrary messages from an untrusted network of servers operated by unknown parties is ripe for exploitation.

Attackers have learned to modify the open source ElectrumX server software to always send arbitrary error messages. The screenshot below illustrates an error popup message that I received on a vulnerable Electrum Wallet:

Following the website in the error message leads to a phishing site with several versions of the Electrum Wallet available for download. After the user downloads a fake update, the backdoored versions of Electrum Wallet will steal user’s funds.

So what are those servers? How do attackers manage to force a wallet to connect to them and display malicious messages? To answer these questions, I had to step back and explore how the Electrum network is built and figure out its weaknesses.

The Electrum Network

As a light bitcoin node, the Electrum Wallet does not maintain the entire state of the Bitcoin blockchain. Instead, the Electrum Wallet relies on a distributed network of gateway servers which can query the complete blockchain state and transmit transactions on its behalf.

One implementation of such gateway server is called ElectrumX. The ElectrumX server builds on top of a full Bitcoin node and introduces a number of convenience functions to help Electrum Wallets interact with the blockchain. The diagram below illustrates the relationship between an Electrum Wallet client, ElectrumX servers, and the rest of the Bitcoin network:

The ElectrumX servers form their own distributed network to increase resiliency to individual nodes going offline or falling behind the blockchain. The network relies on anonymous volunteers who get no financial incentive (e.g. there are no transaction fees). Electrum servers actively discover, advertise, and maintain connections with other servers through a peering process. As a new ElectrumX server comes online, it can announce itself to the rest of the network and start accepting connections from Electrum Wallets. Here is a snippet from the Peer Discovery specification describing the process:


:func:`server.add_peer` is intended for a new server to get itself in the connected set.

A server receiving a :func:`server.add_peer` call should not replace existing information about the host(s) given, but instead schedule a separate connection to verify the information for itself.

To prevent abuse a server may do nothing with second and subsequent calls to this method from a single connection.

The result should be True if accepted and False otherwise.

The way that the add_peer verification process is implemented in practice is that the server simply verifies that the provided peer hostname resolves to the IP address of the node attempting to join the network.

When the Electrum Wallet first connects to the network it has a hard-coded list of trusted servers. However, after it establishes the initial connection and as a user connects to different servers, it actively discovers and saves additional Electrum nodes by asking them for their peer sets (servers they know about). For example, the image below shows the Electrum Wallet network configuration dialog and all of the discovered peers which may be used to connect to the network at a later time:

As Electrum Wallet discovers new servers and their peers, they are added to the local storage and depending on a user configuration may be used the next time the client connects to the network. By design, the Electrum Wallet attempts to maintain connections to a randomized selection of discovered servers on the network.

In the case of a phishing attack described above, the Electrum Wallet would have to discover and connect to a malicious ElectrumX server which in turn would trigger a popup dialog. The more malicious ElectrumX servers in the network, the higher the chance that a wallet will be attacked. In order to understand exactly how an attacker can do that, I needed to better understand how clients and servers communicate over the Electrum network.

Communication Protocol

The communication between ElectrumX servers and wallets uses a protocol based on JSON RPC. The protocol relies on a collection of verbs which can be used to obtain server properties and interact with the blockchain. Here is a sample exchange between a client and a server to obtain a server version:

Client ->
{“id”: 3, “method”: “server.version”, “params”: []}
 <- Server
{“jsonrpc”: “2.0”, “result”: [“ElectrumX 1.9.5”, “1.2”], “id”: 3}

In the above exchange, I used the verb server.version to which the server replied with a string “ElectrumX 1.9.5”. Another common interaction between both servers and wallet clients is to obtain a list of peers. In order to simulate a fake wallet software, I used the several examples and libraries in the excellent connectrum python module:

$ python cli.py --server electrum.hsmiths.com --port 50001 --protocol t server.peers.subscribe 
Connected to: electrum.hsmiths.com
Method: server.peers.subscribe

The response contains a nested data structure with a complete list of every server that this node is aware of. Let’s break down individual lines to see what they mean:

"”, <- server IP address
"daedalus.bauerj.eu”, <- server hostname
"v1.4.1”, <- server version
"s50002”, <- SSL port
“t50001” <- TCP port

There are some commands which are reserved for server to server interaction only. For example, server.add_peer mentioned above is meant to be used by an ElectrumX server to add itself to a peer list of another ElectrumX server.

Crawling the Electrum Network

At this point, I had enough understanding of both the network architecture and the communications protocol to start recursively querying peer lists from ElectrumX servers in order to map out the entire network:

$ python spider.py servers.json --protocol s
963 servers are known to us at start
812 servers are right protocol gave 13 peers
found 1 more servers from electrum6086073.livex.biz: electrum666370.tnsfr.link
electrum7583805.rollerco.xyz gave 148 peers
electrum811908.fullhealth.net gave 133 peers
electrum3436028.rollerco.xyz gave 148 peers
electrum8068921.fullhealth.net gave 131 peers
electrum7509195.rollerco.xyz gave 147 peers
electrum6957631.elastics.info gave 150 peers
electrum1231318.tnsfr.link gave 155 peers
electrum1644345.rollerco.xyz gave 149 peers
electrum3912268.tnsfr.link gave 154 peers
electrum4994636.rollerco.xyz gave 148 peers
electrum1014156.tnsfr.link gave 156 peers
electrum345782.tnsfr.link gave 155 peers
electrum2884548.rollerco.xyz gave 148 peers
electrum4699142.tnsfr.link gave 156 peers

As I was slowly aggregating all of the known peers on the network (more than 1000 right now), I started noticing suspicious looking domain names which appeared to be randomly generated and also announced similarly random looking nodes:

$ python cli.py --port 50002 --protocol s server.peers.subscribe --server electrum6086073.livex.biz
Connected to: electrum6086073.livex.biz
Method: server.peers.subscribe

A lot of them had more interesting similarities like being hosted on the same IP address or simply being aliases for the same domain:

$ host electrum5391756.rollerco.xyz
electrum5391756.rollerco.xyz is an alias for rollerco.xyz.
rollerco.xyz has address
$ host electrum6001717.livex.biz
electrum6001717.livex.biz is an alias for livex.biz.
livex.biz has address

Using randomly generated subdomains as aliases to a single domain is a clever exploit of ElectrumX’s peer verification process which simply verifies that the advertised hostname resolves to the originating IP address. As a result, it is possible to flood peer tables with these ghost servers to perform a Sybil attack, where an attacker attempts to fill the network with servers they control to increase their chances to connect with Electrum clients.

Finding evil

But are these servers truly malicious? The best test for whether or not these servers are evil is to trigger the phishing exploit where they would attempt to instruct my “fake” client to open a popup. Based on the notes posted on the Electrum’s GitHub issues page, the error message is forced when a client attempt to broadcast a Bitcoin transaction. I sent a sample bitcoin transaction to the node server using the blockchain.transaction.broadcast verb and indeed received a phishing error message:

Connected to: electrum6001717.livex.biz
Method: blockchain.transaction.broadcast
({'code': 1, 'message': '<b>Transaction error.</b><h1 style="white-space:nowrap">Required Security Update (v3.3.3)</h1><p>Download: <a style="text-decoration: none;" target="_blank" href="https://www[.]electrumbuild[.]com/#download">https://www[.]electrumbuild[.]com</a></p><p>This important security update provides a fix for transaction deserialization vulnerability and is mandatory for all users.</p><p>Transactions can only be sent after applying this update. You can visit the website above to download the new version of Electrum.</p><p>We sincerely apologize for any inconvenience this has caused you.</p><p>© Electrum Technologies GmbH</p>'}, {'id': 2, 'method': 'blockchain.transaction.broadcast', 'params': ('010000000[..ABBREVIATED..]8888ac2c480700',)})

The server attempted to send a crafted html page to whomever was trying to use it, directing them to download a fake update from https://www[.]electrumbuild[.]org.

The phishing website looked almost exactly like the original and even advertised the current version of Electrum Wallet at the time. Of course, all of the binaries were backdoored and neither of the file hashes matched the original.

Finding more evil

After crawling the network for awhile longer, I aggregated almost 1000 unique nodes. It made sense to automate the hunting for malicious servers by scanning a range of Electrum nodes and attempting to trigger a transaction error. All of the error messages were compared against a whitelist of known server responses and any deviations were recorded for further analysis. Below is a sample output of the scanning tool that I wrote for this purpose:

$ python electrohunt.py servers.json --output evil.json
[*] Scanning 967 servers...
[*] Connected to using SSL
[*] Connected to using SSL
[*] Connected to using SSL
[*] Connected to using SSL
[*] Connected to electrum3402488.livex.biz:50018 using SSL
[*] Connected to using SSL
[*] Connected to using SSL
[!] electrum3402488.livex.biz:50018 sent an unusual error:
({'code': 1, 'message': '<b>Transaction error.</b><h1 style="white-space:nowrap">Required Security Update (v3.3.3)</h1><p>Download: <a style="text-decoration: none;" target="_blank" href="https://www[.]electrumupgrade[.]org/#download">https://www[.]electrumupgrade[.]org</a></p><p>This important security update provides a fix for transaction deserialization vulnerability and is mandatory for all users.</p><p>Transactions can only be sent after applying this update. You can visit the website above to download the new version of Electrum.</p><p>We sincerely apologize for any inconvenience this has caused you.</p><p>© Electrum Technologies GmbH</p>'}, {'id': 2, 'method': 'blockchain.transaction.broadcast', 'params': ('010000000[..ABBREVIATED..]8888ac2c480700',)})
[*] Connected to using SSL
[!] sent an unusual error:
({'code': 1, 'message': '<b>Transaction error.</b><h1 style="white-space:nowrap">Required Security Update (v3.3.3)</h1><p>Download: <a style="text-decoration: none;" target="_blank" href="https://www[.]electrumupgrade[.]org/#download">https://www[.]electrumupgrade[.]org</a></p><p>This important security update provides a fix for transaction deserialization vulnerability and is mandatory for all users.</p><p>Transactions can only be sent after applying this update. You can visit the website above to download the new version of Electrum.</p><p>We sincerely apologize for any inconvenience this has caused you.</p><p>© Electrum Technologies GmbH</p>'}, {'id': 2, 'method': 'blockchain.transaction.broadcast', 'params': ('010000000[..ABBREVIATED..]8888ac2c480700',)})
Successfully connected to 657 nodes.
Failed to connect to 0 nodes.
There were 28 invalid nodes.
Detected 471 potentially evil nodes:

Based on the automated scanning for phishing messages, I observed more than 471 confirmed malicious servers out of a total of 657 active nodes. That’s a staggering 71% of the entire scanned network being controlled by attackers. The vast majority of them appeared to be a part of the same campaign described above. However, there were also a few additional unique attempts at exploitation:

[*] returned an unexpected message:
<b>Error sending transaction.</b>
<h1 style="white-space:nowrap">Security update required (2019-002 v3.3.4)</h1>
<p>This important security update provides a fix for transaction deserialization vulnerability and is recommended for all users.</P>
<p>Transactions can only be sent after applying the update. Please visit the link below to find instructions on how to update to Electrum 3.3.4.</p>
<p><font color='blue'>
<p>We will post more detailed information in the near future. Please visit our website for more information.<p>

The Github page was created about 5 days earlier and contained several backdoored Electrum “releases”:

The Github security team was very effective at responding to the my takedown request . The attackers have since shut down their ElectrumX servers and appeared to stop their campaign on the Electrum network.

Campaign Analysis

Overall there were at least two ongoing campaigns abusing the Electrum transaction error vulnerability with slightly different tactics.

Campaign #1 relied on a large number of randomly generated and aliased nodes such as electrum5384894[.]lightspeed[.]tel. The campaign advertised a URL with a link to an almost mirror image of the official Electrum website.

Grabbing all of the malware samples from the phishing site, I quickly took them apart to see what attackers modified. The malware samples used in the campaign were based on modified versions of the Electrum-3.3.2 wallet and targeted Windows, Mac, Linux, and Android platforms. A number of modifications to the original were performed to force transactions to go to bc1q92md7868uun8vplp9te0vaecmxyc5rrphdyvxg and later to bc1qhsrl6ywvwx44zycz2tylpexza4xvtqkv6d903q Bitcoin addresses. The backdoored binaries have also disabled Electrum’s update mechanism and other transaction security notifications. It was interesting that the malware was checking for minimum balance of 0.05 BTC before attempting to steal funds.

The actors behind this campaign changed the destination phishing site on almost daily basis. They were actively monitoring and adding new first level domains to avoid detection. As a new version of the official software was released, the actors quickly updated their backdoored Electrum Wallet and the phishing site within a day. I took a look at those as well and they only modified the destination Bitcoin address to steal funds.

The use of aliases to inflate the total number of connected nodes used by the attackers in Campaign #1 was an interesting exploit of the Electrum network’s peer verification system. At one point, they may have controlled up to 71% of the network.

Overall the campaign appeared to be very successful with just one addresses used in the malware aggregating 55 BTC (about $200,000 at the current rate) and almost 10 BTC in another with new transactions showing up hourly. Below is a screenshot listing most recent transactions from Smartbit’s blockchain explorer:

Campaign #2 relied purely on IP addresses with no hostnames for their nodes. This campaign attempted to direct users to a malicious Github page which was also designed to look official. The actors in this campaign advertised wallet version 3.3.4. It appears this group was taking a more stealth approach with fewer but better connected nodes.

I collected two unique collections of malware samples for this campaign. The first collection was targeting Bitcoin users and simply uploaded private keys and seed data to http://4a5e1e4baab[.]com. The second sample was a bit more sophisticated and implemented Litecoin address replacement logic in addition to being able to also upload private keys and seed data to several obfuscated addresses. See Appendix B for more details.

The campaign also appeared to be fairly successful with one of the Litecoin addresses collecting a few thousand dollars worth of LTC:

Additional analysis is necessary to gather threat intelligence on the infrastructure used by the attackers in each campaign to truly understand their scope and actors behind them. However, this will be covered in an upcoming Part 2 of the Electrohunt series.

I listed all of the domains, hashes, and malware indicators observed so far in Appendix A, B, and C below.

Present and future Electrum network threats

After spending some time monitoring the Electrum network, it is clear to me that it is under a persistent attack from one or more determined actors. The current attack pattern is based on exploitation of a known and already patched vulnerability in Electrum Wallets. However, attackers may change their tactics from simply dominating the network to push malicious error messages to attempting to trick Electrum clients’ view of the state of the Bitcoin network in the future.

For example, the attackers could use their dominant position to hide inbound transactions or prevent users from being able to broadcast theirs. There are also privacy risks, as the attacker with the majority of controlled nodes could attempt to deanonymize users by observing all of the IPs associated with a single Bitcoin address.

Electrum Wallet and server developers have recently taken active steps to defend the Electrum network. For example, the latest version of the ElectrumX server implements node blacklists which already captures bad nodes in Appendix C. The Electrum Wallet developers have now completely disabled the vulnerable error popups feature. It is a responsibility of server operators and wallet users to upgrade their software in orders to take advantage of these defenses and to avoid further fund theft.

Remaining vigilant and downloading software only from trusted sources will remain the best advice for users of Electrum Wallet.

The field of cryptocurrency security is still very young. I hope some of you readers will be motivated to join me in this new field and contribute to making the future open financial system more trusted and more secure. Check out our open careers at coinbase.com/careers.

This website contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of Coinbase, Inc., and its affiliates (“Coinbase”), and Coinbase is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. Coinbase is not responsible for webcasting or any other form of transmission received from any Third-Party Site. Coinbase is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by Coinbase of the site or any association with its operators.

Unless otherwise noted, all images provided herein are by Coinbase.


Appendix A — Discovered Phishing Sites

Campaign #1


Campaign #2


Appendix B — Malware

Campaign #1

ec0d6d90c0c63ebc635280ccf481c374 Electrum-
f53d2f76d36932bbf3f7762b18b7b278 electrum-3.3.3.dmg
b53905bef4194fd247511d1788ea36f8 electrum-3.3.3.exe
590ed8124a453acd65f753c0eae1c54f electrum-3.3.3.exe.asc
48bab01fd9d1f64039a792aaf7740492 electrum-3.3.3-setup.exe
1460670adf6184b92005fe47f0c3f519 electrum-3.3.3-setup.exe.asc
49ae3d041ef9734db7c09395dca10dc9 Electrum-3.3.3.tar.gz
55db5df25aa283c61050043da29ca706 Electrum-3.3.3.zip
Bitcoin address: 
ec0d6d90c0c63ebc635280ccf481c374 Electrum-
cda16f12ecac49163ddb0f36bca579e8 electrum-4.0.0.dmg
dd435f1bc9bbfcd6abdc9412a5f076c4 electrum-4.0.0.exe
8b2fd24ccd23aa749d4847d2e1373699 Electrum-4.0.0.tar.gz
3122fa940d25911853436497b4821e4b Electrum-4.0.0.tar.gz.asc
c196c792629dd73e4f1f1da724367b2b Electrum-4.0.0.zip
Bitcoin address:

Campaign #2

677203ab5ad2b8116893fcbd71d497ce Electrum-
926d4a2dcf93d2012456d5f0058cd62b electrum-3.3.4.dmg
1a2509b48230b90b64a2b10625bce801 electrum-3.3.4.exe
dbb13365c1cfc5df5f480670827b6a36 electrum-3.3.4-portable.exe
bf6e1be858bfa07f8d625373ff3ab80d electrum-3.3.4-setup.exe
809c9faa38cbfa3deeca012bee7e3275 Electrum-3.3.4.zip
Payload dump site: http://4a5e1e4baab[.]com
POST request with “data=” parameter
b2dd8dc636909577fdaf57ad728c677e electrum-ltc-3.3.4.dmg
a8142ae8fa735414a8b435f0912dea0d electrum-ltc-3.3.4.exe
58ee1fcf0d2245b8e8b3094dd24aa6a6 electrum-ltc-3.3.4-portable.exe
09de0a6c2149edfb4093b4978afd364f electrum-ltc-3.3.4-setup.exe
6eda4fc5243586c42f1d8727c83d2fc3 litecoin-3.3.7.zip
Payload dump sites:
Litecoin addresses: 

Appendix C — Malicious Electrum Nodes

Campaign #1

NOTE: replace nodes with [\d*] with randomly generated digits (e.g electrum6313288.arcade[.]tel or simply electrum.arcade[.]tel)

Campaign #2

Electrohunt Part 1: Hunting for the phishing campaigns on the Electrum network was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.


You might also like:

Comment on this post

Loading Facebook Comments ...
Loading Disqus Comments ...

No Trackbacks.