Electrum rogue servers stole Bitcoin when users raised fees on faked pending payments. The Electrum team shipped 4.8.3 on October 24. The update closes a serious flaw in older builds. Developers confirmed active abuse and at least one reported loss. That is the stake for Bitcoin wallet security. A light client can show a fake send. A manual fee bump can turn it into a real payment to an attacker.
How Electrum Rogue Servers Replaced Pending Payments
According to Electrum’s October 24 security advisory, the bug lay in how the wallet handles unconfirmed transactions. Electrum asks outside servers for mempool data. It does not run full Bitcoin checks on every pending entry.
Before the patch, a connected server could push pending details without signature checks on the user’s own inputs. Attackers used that trust when a user tried to send Bitcoin. The ElectrumWallet account also flagged the release.
A bad server first swallowed the real transaction. It kept that payment off Bitcoin’s peer network. Then it dropped a conflicting fake into the wallet history. That fake pointed the coins at an attacker address. The fake had invalid signatures. Electrum still showed it as an unconfirmed send.
Users could take that line for their own payment. If they chose Replace-by-Fee (RBF) to speed confirmation, the wallet built a higher-fee swap from the fraud details. RBF is a normal fee tool. But approving that bump made the wallet sign a valid payment to the attacker. The theft landed only after the user confirmed the fee rise.
Two Reports Showed Active Bitcoin Theft
Electrum developers got two private reports. On October 11, the first user saw an unexpected transaction after a real send. The original payment never hit the Bitcoin network. That case used a multisignature wallet tied to two Trezor devices. Those devices had already checked the intended payment.
On October 18, a reporter tagged as Raju-K12 said they lost Bitcoin after bumping the fee on a swapped transaction. Developers then confirmed that some servers were running the attack. Both users saw destination addresses that matched the last four characters of the real ones. That lookalike pattern can fool a rushed check. In the second case, the forged transaction reportedly carried no fee. That may have pushed the victim to raise it. Electrum did not name the stolen amount or the bad servers.
Electrum 4.8.3 Adds Signature Checks
Electrum locked 4.8.3 on October 23 and posted downloads on October 24. The same day, developers disclosed the issue. Commit 90fe308 makes Electrum check signatures on wallet-owned inputs. It does this before it adds certain mempool transactions to local history. That blocks rogue servers from planting fake outgoing sends.
The patch still does not check every incoming unconfirmed transaction. Electrum remains a light client, not a full node. Users on older builds should upgrade. They should also double-check recipient addresses and amounts before they sign. Developers said wallets that talked only to trusted servers, including self-run ones, were not hit by this attack. For readers tracking crypto hacks, the lesson is clear. Fee bumps on unconfirmed light-wallet history need the same care as a fresh send.
