Bifrost Hack

Bitcoin wallet Bifrost was attacked by hackers.

During the attack, the key of the server issuing the address was revealed, and the attacker was able to self-sign his own deposit address. Since the attacker could generate a valid signature on the deposit address, the BiFi platform recognized the attacker's $BTC transfer as a $BTC deposit in Bifrost. As a result, the attacker was able to borrow 1,852 $ETH with fake deposit.

Bifrost is a web3 derivatives protocol that provides decentralized cross-chain liquidity for staked assets. During the attack, the server key of the address issuing server was revealed, which is why the attacker was able to independently sign his own deposit address. In this transaction, the attacker signs the address: https://etherscan.io/tx/0x1a507140…88a29d

Since the attacker managed to generate a valid signature on the deposit address, BiFi recognized the attacker's $BTC transfer as a deposit, so attacker sends 321.7 $BTC as a "deposit": https://www.blockchain.com/btc/tx/dd0bf6ab976f2090dd48cf6223a50e3c6c8a616e5c28dfc9448f81f1b7e99346

The relayer detected the deposit and transmitted the verified deposit history to BiFi. Then the relayer minted $BiBTC as a $BTC collateral for the attacker.

Transaction of deposit detection: https://etherscan.io/tx/0x5c0460f5…c39e69

Transaction of deposit confirmation with minting $BiBTC: https://etherscan.io/tx/0x2e4422dd…a0c15f

The attacker then called the borrow() function to take 1.8k $ETH:

https://etherscan.io/tx/0x4b5d6687…dfcf76

which were subsequently withdrawn via Tornado.cash.

Attacker address on ETH: https://etherscan.io/address/0x282971de…4a6b10

Attacker address on Bitcoin: https://www.blockchain.com/btc/address/bc1qmgh7w47myz7kt7x34zqlr5azck7u8j8ewg3u2j

Attacker public keyhash: 0xDa2fe757…C3c8F9