Ledger’s cryptocurrency and NFT hardware wallet was hacked, leaking over $600,000 in cryptocurrency

adminDecember 15, 2023

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On December 14, Ledger, a company that creates physical cryptocurrency wallets similar to USB drives or other storage devices, saw its Ledger Connect Kit software compromised, draining hundreds of dollars from users’ wallets. In this article, we’ll take a closer look at what went wrong.

Ledger hardware wallet was hacked – what went wrong?

Blockaid, a popular cryptocurrency security startup, was the first security company to detect a malicious attack on Ledger Connect. “We have detected a potential supply chain attack against our Ledger connectivity kit. Attackers injected a wallet-draining payload into a popular NPM package. “This raid is currently affecting several popular Dapps.” But what went wrong?

🚨 We have detected a potential supply chain attack against the Ledgerconnect kit 🚨
Attackers injected a wallet-draining payload into a popular NPM package.
This currently affects several popular dapps, including but not limited to https://t.co/2QJmKIGv9T.
— Block Aid (@blockaid_) December 14, 2023

Ledger started its journey in 2014. The company was started by a team of crypto experts with complementary backgrounds to ensure the blockchain revolution. Ledger has more than 700 employees across eight offices, including Paris, Vierzon, London, Portland and Singapore.

Since its inception, Ledger has emerged as one of the most trusted cryptocurrency security devices, gaining immense trust among millions of users. Their devices are powered by the Secure Element chip and Ledger’s proprietary OS, which has been battle-tested for years by security experts.

In a short statement, Ledger clearly explained that the attack originated as a phishing attack targeting former employees. The hackers published malware that sent user funds back to their wallets during transactions with decentralized applications, or dapps, that used the affected software.

🚨Please be aware of ongoing phishing and scams.🚨
We only have two real social media accounts. @ledger and @ledger_support.
The rest are all fake accounts.
— Ledger (@Ledger) December 14, 2023

Ledger Company said the malware was alive for about 5 hours. Fortunately, security experts were able to disable the malware and replace the subject’s Ledger Connect Kit with a new, more secure Ledger Connect Kit.

According to Blockaid estimates, between 500 and 1000 cryptocurrency wallets were compromised, resulting in over $500,000 being stolen from cryptocurrency and NFT users. Commenting on the hack in a short interview, Blockaid co-founder and CTO Raz Niv said the hack was not limited to Ledger customers and users of various hardware and software wallets from other providers were also affected.

Ledger CEO describes hack as ‘isolated incident’

In a follow-up blog post, Pascal Gauthier, Ledger’s president and CEO, expressed regret and sympathy for all affected users and pledged to do whatever is necessary “to find these bad actors and bring them to justice.” The chief executive said the hack of Ledger’s Javascript connector library was an “isolated incident” and promised tighter security controls.

My Personal Commitment: Ledger will dedicate as many internal and external resources as possible to helping affected individuals recover their assets.
— Pascal Gauthier @Ledger (@_pgauthier) December 14, 2023

The latest security breach is another black eye for Ledger, which came under heavy criticism in May for a new security tool that many users claim goes against the basic tenets of cryptocurrency. The ledger hack reflects the ongoing presence of security attacks in the cryptocurrency industry, according to data from analytics firm TRM Labs. This resulted in cryptocurrency projects losing $1.7 billion in 2023 due to abuse.