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Image: Crypto Deep Tech
In a jaw-dropping revelation, researchers at Crypto Deep Tech have exposed a severe cryptographic vulnerability in the ubiquitous ESP32 microcontroller, cataloged as CVE-2025-27840, which could put billions of IoT devices—and the Bitcoin wallets they touch—at risk.
The ESP32 chip is embedded in countless devices offering Wi-Fi and Bluetooth connectivity—from smart doorbells to crypto hardware wallets. But this convenience now comes with a caveat: “Attackers can unauthorizedly access Bitcoin wallet data by using the ESP32 chip as a point for cryptographic attacks,” warns the report.
The CVE-2025-27840 vulnerability acts as a stealthy backdoor that allows attackers to introduce hidden flaws via module updates—a scenario ripe for supply chain attacks. Once compromised, devices may leak Bitcoin private keys or allow unauthorized transactions.
Among the identified flaws:
- has_invalid_privkey: Fails to reject keys ≤ 0, opening doors to “invalid private key” usage and financial loss. “This bug allows bad private keys to be used, which can lead to serious problems, including loss of money,” the report states.
- electrum_sig_hash: Electrum’s non-standard message hashing makes it incompatible with BIP-137, enabling signature forgery.
- random_key: A weak pseudo-random number generator (PRNG) that makes Bitcoin keys dangerously predictable. “Using the
randommodule is not suitable for cryptographic purposes because it does not generate sufficiently random numbers.” - multiply: Lacks curve point validation, making invalid curve attacks possible via ECC manipulation.
- ecdsa_raw_sign: A flaw in Y-coordinate restoration could let attackers forge public keys.
- bin_ripemd160: Legacy fallback hashing APIs leave the network open to hash collisions and deprecated library exploits.
Crypto Deep Tech included multiple proof-of-concept scripts that simulate attack chains exploiting these vulnerabilities. These scripts demonstrate:
- Generating invalid private keys using weak PRNGs.
- Forging Bitcoin signatures due to flawed hashing.
- Extracting Bitcoin private keys via Small Subgroup Attacks and manipulating ECC operations.
- Creating fake public keys by exploiting ECC Y-coordinate ambiguity.
In one simulated attack, researchers used a vulnerable RawTX transaction and recovered the actual private key behind a Bitcoin wallet holding 10 BTC:
Billions of devices using ESP32 are now potentially vulnerable, many of which serve as entry points into secure networks or as storage for cryptographic credentials.
According to the report: “Attackers can spoof MAC addresses, manipulate memory, and inject malicious code… leading to theft of private keys of Bitcoin wallets.”
The consequences extend beyond individual losses—this vulnerability could be weaponized in state-sponsored cyber-espionage, large-scale financial theft, or coordinated IoT botnet campaigns.
What began as a microcontroller vulnerability has snowballed into a systemic risk that threatens the cryptographic backbone of the Bitcoin network. As IoT and blockchain continue to converge, the CVE-2025-27840 issue reminds us that even the smallest component can trigger the loudest alarms in cybersecurity.
“The need to improve security in devices and networks such as the ESP32 is becoming increasingly urgent,” the report concludes.
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