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cypherpunks01 16 hours ago [-]
Seems that an Elements rangeproof cache bug may've gotten exploited. Fix for suspicious issue was committed just last week and attackers could've monitored the public commits and exploited the bug before fix was ever pushed?
Sort of self-fulfilling prophecy if true, that's a leading theory anyhow.
fix: range proof cache bind to asset and scriptpubkey
> Fixes a number of small issues picked up during LLM scans
harrouet 9 hours ago [-]
- Praise DeFi for setting you free from regulations and big-money banks
- Give your money to shenanigans who pretend to know what they're doing
- [...]
- Cry that no independent regulator audited their systems and that the transactions were not reversible.
embedding-shape 8 hours ago [-]
Great, blog spam comments on HN now? Where is the "Cry that no independent regulator audited their systems and that the transactions were not reversible" coming from? Neither the Twitter thread nor the HN comments even mention anything about this, just the typical argument against yourself?
harrouet 8 hours ago [-]
I am just saying that this would not happened with a normal bank. Pure DeFi structural deficiency.
But I see how polarized you are about the topic.
embedding-shape 8 hours ago [-]
> I am just saying that this would not happened with a normal bank
Ok, but who were you quoting before? I too see how polarized your view seems to be, given you started this conversation with arguing against yourself for some reason.
harrouet 7 hours ago [-]
> you started this conversation with arguing against yourself
How so ?
Meanwhile, what you qualified as blog spam is actually proving to be written by a human spending too much time answering your rant.
That the concept of comments: those lines come from me. No AI (can you believe?)
embedding-shape 5 hours ago [-]
Hence the whole "arguing with yourself" part...
Generally, we use quotes here for actual quotes, not quoting stuff we've read in other newspapers or on reddit or whatever, but real verbatim quotes.
I think it used to be a proper guidelines back in the day, or at least people got really up in their arms if you used quote syntax for things that weren't actually verbatim quotes.
But besides that, what's the point? Why share other's viewpoints you don't even agree with, so you can argue against them yourself? Why not wait until someone who actually has those viewpoints, share them? Or even better, why not just say nothing at all?
toasty228 4 hours ago [-]
Did you create an account this morning? This trend is a good ten year old lmao
shuwix 6 hours ago [-]
[flagged]
rgbrgb 12 hours ago [-]
There’s kind of an interesting thread here about open source, which is usually thought of as more secure because of more eyes on the code, actually being less secure because an accidental merge can be exploited instantly with LLM’s monitoring. Is there a lot more security value in obscurity than before?
teravor 12 hours ago [-]
false security. if there aren't LLM's monitoring patches with disassembler MCPs ready, there will be soon.
alex_duf 10 hours ago [-]
Maybe there's a middle ground where the code itself is only made visible at the same time as the latest build.
This shortens the exploit window
ranger_danger 9 hours ago [-]
There are some projects that only release sources as a flat tarball at the same time as a new release, no git history/repo is available.
As of writing, no response from Blockstream, and funds are still controlled by the attackers.
14 hours ago [-]
tom_ 17 hours ago [-]
Purported white-hat hackers. The implication is that these people are presumably describing themselves as such, but it may not actually be true.
kennywinker 15 hours ago [-]
I can imagine one’s hat changing color when faced with a pot that big…
cyanydeez 14 hours ago [-]
[flagged]
wjnc 10 hours ago [-]
This is funny. Is this analogous to finding a wallet on the street and returning it (in my locale: and getting a finders fee), or is this analogous to taking a wallet from a drunk sleeping person (morally dubious), contacting them the day after to return the wallet, or is it just stealing per se.
Where I live it's only theft if there is an intention to unlawfully take ownership of the good. As an example, forgetting to pay in a supermarket lies exactly on that boundary. Take a cart or hide a product and you won't get away. Try to pay, payment fails and you don't notice, walk away and get apprehended and you might convince the judge that you had no intention to unlawfully take ownership.
embedding-shape 6 hours ago [-]
> This is funny. Is this analogous to finding a wallet on the street and returning it (in my locale: and getting a finders fee), or is this analogous to taking a wallet from a drunk sleeping person (morally dubious), contacting them the day after to return the wallet, or is it just stealing per se.
Kind of in-between I'd say. You find a wallet, on a bench, next to sleeping person, and you see lots of other people eying the wallet to take for themselves. You take the wallet to prevent others from taking it essentially.
Not saying these people for sure are whitehats/grayhats, who knows until the funds are returned, but that's basically how grayhatters see themselves.
enoint 6 hours ago [-]
Well, exploits are different than sticky fingers. Those white hats could claim they raided preventatively.
faitswulff 16 hours ago [-]
The same reason scam artists describe themselves as businessmen
simonw 17 hours ago [-]
Presumably to try and reduce the chance of a mass panic among their users.
jeremyjh 15 hours ago [-]
9 times out of 10 when an exchange or broker is "hacked" its been the operators of the exchange.
thephyber 15 hours ago [-]
You have worded this like a fact, but this is your opinion.
pingupongu 7 hours ago [-]
It's just another psyop to accomplish some job by bitcoiners for bitcoiners.
mvdtnz 17 hours ago [-]
What do they care if there's a panic? They have "paused the sidechain". No one can act on their panic.
cool_dude85 16 hours ago [-]
Wasn't this all supposed to be decentralized? How can a foundation choose to unilaterally "pause the sidechain"?
Kranar 16 hours ago [-]
BTC Liquid Network is not decentralized and does not purport to be. It's a federated sidechain, that is... it's a blockchain that runs alongside the Bitcoin blockchain (using a two-way peg that lock real BTC on the Bitcoin blockchain and issues an equivalent amount of Liquid BTC on the Liquid sidechain) but blocks can only be added to the Liquid Network sidechain by some of the handpicked members of the federation.
esseph 14 hours ago [-]
[flagged]
thephyber 15 hours ago [-]
You are conflating the original BTC network and a lot of the other projects in the cryptocurrency / token / stable currency space.
Every time there was a new token that was 80% reminded or was governed by a central company, the original cryptocurrency enthusiasts cried fowl.
Most people don't read the fine print, don't read the founding white papers, and don't care about the differences between the protocols and the networks when they should.
vkou 13 hours ago [-]
I think it's more that the 'original cryptocurrency enthusiasts' tend to look the other way, because the more of these weird shitcoins/nfts/networks get minted, the more their numbers go up.
It's 2026. Show of hands, who here actually uses any of this, and why?
nullc 13 hours ago [-]
I worked at blockstream back in 2017 and developed the original cryptographic range proofs which are the ancestors some of the involved code here. However, the vulnerabilities here and the whole liquid product as it exists today postdates my involvement in the company (while I was there it was under initial development but envisioned quite differently than what they eventually did), and I haven't followed any of it closely since.
But I gave this issue a quick look based on the transactions and github history.
Underlying issue was related to validation caching. Signatures and proofs are expensive to validate, to improve performance and prevent certain DOS attacks their validation is cached. It's important that the key used in the cache capture everything that goes into the validation decision (though to prevent some attacks its important not too much goes into the key, or an attacker can flood with valid proof attacked to insignificantly different transactions).
It appears to me that there was a longstanding vulnerability-- stemming back to the introduction of multiple-asset-support-- which could cause a consensus split/ddos. But on a lazy review I can't come up with any way of translating it into theft. I see how someone could make an invalid transaction that would be falsely accepted by nodes that have cache state from a constructed prior transaction, but the ways I can come up with results in the invalid transaction just burning assets--- not directly very useful. [Big asterisks on the non obviously exploitable here, I've only thought about it for a minute or two and I really know fairly little about assets support in Liquid-- but exploiting it would require being able to create a fake 'shadow' asset with the a generator that is the negation of a real asset.]
In any case: This was recently fixed, but the "fix" introduced a hash collision vulnerability: The new fields added to the hash were not delimited. Failing to include type information like lengths in hashes is a perennial problem in cryptographic protocols.
Imagine you have a protocol where you sign a {comment, command} tuple, each a string. If the protocol computes the hash by just concating the command and comment and they're variable length fields, then you could get a signature of {"boring comment containing dangerous command", "boring command"} but then present it to someone as {"boring comment containing ","dangerous command boring command"} and have the signature pass. That sort of thing.
This new vulnerability has a somewhat straight forward path to exploitation and prints funds out of thin air.
Based on some of the public comments about nodes rejecting the attack transaction, I'm guessing they rolled out the "fix" to the federation in advance of publishing the changes because they seem to have accepted an attack that everyone else was still rejecting.
Advanced private deployment of a 'fix' might have gave them the confidence to drop the fix on github with little fanfare as it was "already fixed", but doing so painted a target on the issue that remained. Interestingly, off the shelf open weight AI like Kimi K3 immediately identify the new vulnerability without any particularly artful prompting. Makes me wonder if "safe" AI played a role in the introduction of the new, more serious, vulnerability.
I'm going to guess that anyone who actually knows more has their hands busy dealing with the return of the funds. I'm not sure if anyone has ever taken and then returned 1/3rd of a billion dollars worth of assets before.
nullc 12 hours ago [-]
I'm told by someone who threw AI at it that there may be a way to exploit the initial longstanding vulnerability by counting on the fact that updates to validation cache are non-atomic: You can make an invalid transaction that primes the cache before its rejected. But that these priming transactions can't propagate in the network (because they're invalid)... so getting them to the parties that need to sign the blocks might have been impractical to exploit.
Liquid already has confidentiality. I think the question is: how could they coerce the federated authorization to unfreeze peg-out to Bitcoin.
etothepii 15 hours ago [-]
Is there any indications that this and the ColdCard heist could in fact be escaped distilled agents from the huggingface and similar attacks?
the_real_cher 15 hours ago [-]
Now they have 300 million dollars
kennywinker 15 hours ago [-]
That should keep openai liquid for an extra 45min or so.
etothepii 7 hours ago [-]
Not asking whether openAI did the hack that would be insane. However, agents could buy a lot of compute with $500m bit coin.
TZubiri 15 hours ago [-]
One disadvantage of decentralized money, criminals gain more power. Many such cases
lmz 15 hours ago [-]
There are always complaints on here about how Google is only paying $X for vulns. One advantage of decentralized digital money is that its bug bounties are self funding and the payout amount researcher-controlled.
peab 14 hours ago [-]
I'm not sure if there is actually any evidence of this? Criminals do very well without crypto. If you look at percent of the economy that is fraudulent, it is quite large. If you look at percentage of crypto economy that is fraudulent, it is surprisingly similar
TZubiri 10 hours ago [-]
Plenty, search for cases of ransomware for example, you will find hundreds of instances where they demand payment by cryptocurrency, at least 1B per year.
lostmsu 3 hours ago [-]
This lacks comparison to regular economy.
dotancohen 15 hours ago [-]
That is a natural consequence of banks and governments losing power. That power balance shifts towards the citizens... some of whom are criminals.
The coin fanboys will argue that the bankers and government were criminals as well.
thephyber 15 hours ago [-]
This is worded in a way that pretends like the banks and governments themselves aren't considered criminals by the masses.
dotancohen 6 hours ago [-]
I did mention that the coin fanboys think so. Do you invest in any coins?
knorker 9 hours ago [-]
Not really "one disadvantage" as much as "the main use case".
groundzeros2015 13 hours ago [-]
This is a centralization failure. Please learn more before commenting.
georgemcbay 16 hours ago [-]
$320m, not a bad haul.
More than enough to buy yourself a pardon if you get caught.
thephyber 15 hours ago [-]
And remember that there is precedence for Trump pardoned financial criminals avoiding restitution.
pingupongu 7 hours ago [-]
Crypto is a scam, lives of many people ruined, bitcoin is Epstein class owned.
Get rid of it.
MaxikCZ 5 hours ago [-]
Now you've convinced me.
iwontberude 17 hours ago [-]
[dead]
walrus01 17 hours ago [-]
[flagged]
atian 14 hours ago [-]
“Inside job.”
xyst 17 hours ago [-]
It’s not "hackers". It’s an inside job, and a rug pull.
fxwin 16 hours ago [-]
how is it a rug pull? if it's an inside job, doesn't that just make it theft?
knorker 16 hours ago [-]
What's the difference to you between a rug pull and theft?
fxwin 7 hours ago [-]
In a rug pull, the thing you own (usually some kind of digital asset) goes down in value, leaving you with less money than you started with, whereas theft leaves you no longer possessing the asset itself.
bagels 16 hours ago [-]
A few extra steps. Usually, the rug pull doesn't involve directly taking something that belongs to other people, but instead, selling your own thing in a dishonest way.
s1artibartfast 15 hours ago [-]
A rug pull means you hype and then sell on the open market without.
antonvs 15 hours ago [-]
A rug pull involves convincing someone to buy something first.
Theft doesn’t have to involve any convincing.
This is a pretty basic distinction. Perhaps you were thinking of “fraud”?
brador 14 hours ago [-]
Rug pull is a trap, which can include theft. (You pull the rug and the victim in the cartoon would fall into the spikes hole).
Incipient 16 hours ago [-]
That's always a possibility, and I'm sure it has happened a lot. I would suspect with the size of liquid it's more likely it was an exploit, but either way I don't think we'll ever know!
jeremyjh 15 hours ago [-]
Usually we do find out, and in a majority of cases we find out it is a scam by the operators.
15 hours ago [-]
atian 14 hours ago [-]
Yeah it was.
mvdtnz 16 hours ago [-]
I mean of course it was. Everything in this whole ludicrous space is a scam of one kind or another. It's amazing to me that this is still even a point of discussion. It's obviously a rug pull.
pingupongu 7 hours ago [-]
Yes, fork after fork scam to control narrative.
galkk 16 hours ago [-]
Time for bitcoin classic++?
gruez 15 hours ago [-]
Are you thinking of ETH? All the bitcoin classic forks are over various aspect of network rules (eg. block size or block reward), not to roll back a transaction like ETH classic.
galkk 13 hours ago [-]
You’re right, I misremembered. Yeah, I was speaking about ETH Classic thing. Thanks for pointing that out.
medellin 15 hours ago [-]
Yeah… because in 15 years bitcoin has never forked for a hack. What a brain dead comment
Sort of self-fulfilling prophecy if true, that's a leading theory anyhow.
fix: range proof cache bind to asset and scriptpubkey
https://github.com/ElementsProject/elements/commit/c26d719c2...
> Fixes a number of small issues picked up during LLM scans
- Give your money to shenanigans who pretend to know what they're doing
- [...]
- Cry that no independent regulator audited their systems and that the transactions were not reversible.
But I see how polarized you are about the topic.
Ok, but who were you quoting before? I too see how polarized your view seems to be, given you started this conversation with arguing against yourself for some reason.
How so ?
Meanwhile, what you qualified as blog spam is actually proving to be written by a human spending too much time answering your rant.
Who said any of the parts you quoted in https://news.ycombinator.com/item?id=49594757?
It looks like you made up all of those lines.
Generally, we use quotes here for actual quotes, not quoting stuff we've read in other newspapers or on reddit or whatever, but real verbatim quotes.
I think it used to be a proper guidelines back in the day, or at least people got really up in their arms if you used quote syntax for things that weren't actually verbatim quotes.
But besides that, what's the point? Why share other's viewpoints you don't even agree with, so you can argue against them yourself? Why not wait until someone who actually has those viewpoints, share them? Or even better, why not just say nothing at all?
This shortens the exploit window
How many forks and psyops until people realize?
And given the world will never run out of fools, you're actually saying cryptocurrencies will continue working forever?
https://mempool.space/tx/91271efcbb5ab29abfc38ae635f0644e3ba... "Please contact security@blockstream.com"
https://mempool.space/tx/bd81219691eb1e22475c5985d847fa888c3... from Blockstream, unknown PGP message
https://mempool.space/tx/3a3eac4a26395b8c2563aaf1eb8b1b77798... from attackers, "sending most back to bc1qdlld6antmv4xug242ed83q7k4rqw50cwfns38szx4qu2f4jwaxxsuhwxxr, is that ok"
https://mempool.space/tx/8a444eed65c4584f138e08ee138f61490ef... from Blockstream, PGP-signed "Yes, thank you."
https://mempool.space/tx/83825b2135dd0abac12c9dfe17f29ab81b3... from attackers, "Please fix the bug first. The chain is under risk at latest commit right now. Make sure every node is patched. Then we will transfer the money back safely after confirming the fix. The detail is as follows (encrypted using https://blockstream.com/pgp.txt)." with unknown PGP-encrypted payload
As of writing, no response from Blockstream, and funds are still controlled by the attackers.
Where I live it's only theft if there is an intention to unlawfully take ownership of the good. As an example, forgetting to pay in a supermarket lies exactly on that boundary. Take a cart or hide a product and you won't get away. Try to pay, payment fails and you don't notice, walk away and get apprehended and you might convince the judge that you had no intention to unlawfully take ownership.
Kind of in-between I'd say. You find a wallet, on a bench, next to sleeping person, and you see lots of other people eying the wallet to take for themselves. You take the wallet to prevent others from taking it essentially.
Not saying these people for sure are whitehats/grayhats, who knows until the funds are returned, but that's basically how grayhatters see themselves.
Every time there was a new token that was 80% reminded or was governed by a central company, the original cryptocurrency enthusiasts cried fowl.
Most people don't read the fine print, don't read the founding white papers, and don't care about the differences between the protocols and the networks when they should.
It's 2026. Show of hands, who here actually uses any of this, and why?
But I gave this issue a quick look based on the transactions and github history.
Underlying issue was related to validation caching. Signatures and proofs are expensive to validate, to improve performance and prevent certain DOS attacks their validation is cached. It's important that the key used in the cache capture everything that goes into the validation decision (though to prevent some attacks its important not too much goes into the key, or an attacker can flood with valid proof attacked to insignificantly different transactions).
It appears to me that there was a longstanding vulnerability-- stemming back to the introduction of multiple-asset-support-- which could cause a consensus split/ddos. But on a lazy review I can't come up with any way of translating it into theft. I see how someone could make an invalid transaction that would be falsely accepted by nodes that have cache state from a constructed prior transaction, but the ways I can come up with results in the invalid transaction just burning assets--- not directly very useful. [Big asterisks on the non obviously exploitable here, I've only thought about it for a minute or two and I really know fairly little about assets support in Liquid-- but exploiting it would require being able to create a fake 'shadow' asset with the a generator that is the negation of a real asset.]
In any case: This was recently fixed, but the "fix" introduced a hash collision vulnerability: The new fields added to the hash were not delimited. Failing to include type information like lengths in hashes is a perennial problem in cryptographic protocols.
Imagine you have a protocol where you sign a {comment, command} tuple, each a string. If the protocol computes the hash by just concating the command and comment and they're variable length fields, then you could get a signature of {"boring comment containing dangerous command", "boring command"} but then present it to someone as {"boring comment containing ","dangerous command boring command"} and have the signature pass. That sort of thing.
This new vulnerability has a somewhat straight forward path to exploitation and prints funds out of thin air.
Based on some of the public comments about nodes rejecting the attack transaction, I'm guessing they rolled out the "fix" to the federation in advance of publishing the changes because they seem to have accepted an attack that everyone else was still rejecting.
Advanced private deployment of a 'fix' might have gave them the confidence to drop the fix on github with little fanfare as it was "already fixed", but doing so painted a target on the issue that remained. Interestingly, off the shelf open weight AI like Kimi K3 immediately identify the new vulnerability without any particularly artful prompting. Makes me wonder if "safe" AI played a role in the introduction of the new, more serious, vulnerability.
Interestingly, it looks like the funds are being returned: https://mempool.space/tx/3a3eac4a26395b8c2563aaf1eb8b1b77798...
I'm going to guess that anyone who actually knows more has their hands busy dealing with the return of the funds. I'm not sure if anyone has ever taken and then returned 1/3rd of a billion dollars worth of assets before.
The coin fanboys will argue that the bankers and government were criminals as well.
More than enough to buy yourself a pardon if you get caught.
Get rid of it.
Theft doesn’t have to involve any convincing.
This is a pretty basic distinction. Perhaps you were thinking of “fraud”?