Incident Overview
513,000 $ETH has been locked and maintained unreachable on Parity contracts after the user accidentally killed it.
On November 6th, 2017, Github user devops199 posted the following statement under the Github issues section of the Parity Multi-Sig Library: “I accidentally killed it”:
https://github.com/openethereum/parity-ethereum/issues/6995
Just moments earlier, devops199 exploited a vulnerability within the smart-contract library code, blocking funds in 587 wallets holding a total of 513,774.16 Ether as well as various other tokens.
On November 6th, the transaction was sent to WalletLibrary, which called the initWallet method:
https://etherscan.io/tx/0x05f71e1b…0722c9
This transaction ended up making the 0xae7168de…b96952 the sole owner. The transaction, which called the kill method of WalletLibrary with 0xae7168de…b96952 as the beneficiary address:
https://etherscan.io/tx/0x47f7cff7…82f690
Approximately 30 minutes later, Devops199 created Parity issue #6995 to document what had just occurred:
https://github.com/openethereum/parity-ethereum/issues/6995
Devops199 posted a link to the issue in the Parity gitter channel, asking “Is this serious issue?” He then followed up by asking “Will I get arrested for this?”. It seemed as though Devops199 failed to understand the consequences of what he had done, by stating “I’m eth newbie..just learning”.
About three hours later, Parity released a warning on Twitter:
https://twitter.com/ParityTech/status/927850992145719296
Incident Report
Protocol Information
Market Context at Time of Hack
What the Attacker Needed to Succeed
Understanding the prerequisites for this type of attack helps auditors identify protocols that are most at risk and helps developers build better defenses.
What Auditors Should Check
If you're auditing a protocol with similar architecture to Parity, these are the critical security checks that could have prevented this incident (November 2017).
- Verify all logic paths related to Other are guarded by proper access controls and input validation
- Review privileged functions (owner, admin, governance) for potential abuse vectors - centralization risks should be documented and bounded with timelocks or multi-sigs
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