Open Source Hack Creates Vulnerability in Bitcoin Wallet Application Copay

An attack on the Bitcoin wallet application Copay has left many cryptocurrency customers questioning the security of their digital cash. 

It was recently discovered that malicious code was inserted into one of the modules of the popular event-stream JavaScript library event-stream, a library used in the codebase of millions of developers worldwide and at a large number of large and small companies across industries. The affected module, flatmap-stream, was initially inserted into the library in an update in early September, empty and innocuous. Then, in an update on October 8th, the module was updated with malicious code that would target the Copay app.

If affected, Copay wallets with Bitcoin would have been drained and sent to an offshore account in Singapore, according to a report on the story from ExtremeTech.

You can read more coverage from DZone in last week's article on the attack.

The former owner of the event-stream library, developer Dominic Tarr, resigned from the project according to a GitHub thread discussing the security breach. According to Tarr, after resigning from maintaining the library, he transferred ownership to a user only currently known by his username, right9ctrl. When asked about why he provided administrative control to right9ctrl (the account for which has since been deleted), Tarr stated that he no longer had any desire for maintaining or use for the module:

The malicious code appears to have affected versions 5.0.2 and 5.1.0 of the Copay application. Parent company BitPay has since released a statement advising users to assume that their wallets of these versions have been compromised, update their wallets to a newly-released v5.2.0 that has had the malicious code removed, and to move any remaining money in their wallets to one updated to the new version. BitPay stated that they are currently still investigating whether the vulnerability was ever exploited, and if so, how extensive the damage was. 

This news has sent ripples through the open source development community, with many developers highlighting how this hack provides further evidence of the necessity of proper security protocols and governance in open source:

This is not the first time, even this year, that cryptocurrency has experienced security breaches or hacks from malicious players, as multiple wallets from companies around the world have experienced how millions of dollars in cryptocurrency can be lost to a single hack.