Crypto Wallet Users Hit by Suspicious Activity Caused by Low Entropy Mnemonic

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A crypto wallet service – Klever – revealed that a previously known exploit caused by a low-entropy mnemonic affected multiple users. The incident first came to light when users reported suspicious activity in their wallets earlier this week.

According to the company’s update, the algorithm called Random Generation, used by the Bip39 implementation, was previously used by many cryptocurrency wallet providers. However, a flaw in the algorithm compromised the security and unpredictability of the generated keys, thus making the wallets vulnerable to unauthorized access or malicious activity.

Addressing the incident, Klever said that all affected wallets have been imported into Klever Wallet K5. These wallets were not originally created using Klever Wallet K5, but were previously built using an outdated and inefficient pseudo-random number generator (PRNG) method as the source of entropy. According to the company, this algorithm was widely used in the early versions of various crypto wallet providers, which relied on the Javascript platform. He also pointed out that such a weak PRNG algorithm can significantly compromise the security and unpredictability of generated keys, potentially making them more vulnerable to attack or unauthorized access.

On the Klever platform, the core codes responsible for entropy and mnemonic generation that use the PRNG algorithm are implemented with robust security measures and are native to the operating system.

Klever said the incident was similar to one reported by the TrustWallet explorer extension earlier in April. The company advised users who currently have old wallets created before Klever Wallet to quickly switch to new ones created on Klever Wallet K5 or Klever Safe. Initial investigation suggested that the suspicious activity was not exclusive to Klever and that users of multiple wallet providers are affected. SPECIAL OFFER (Sponsored) Binance Free $100 (Exclusive): Use this link to sign up and receive $100 free and 10% off Binance Futures fees for the first month (terms).

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