Man Hacks Trezor and Recovers $2M in Funds

A portland engineer spent months staring at his hardware wallet wondering if all was lost. In 2018, he made an initial investment of $50,000 into a project named Theta. This cryptocurrency did not do so well during the 2018-2019 bear market but as many new investors joined the market in the last year, the investment began to grow. Once the investment had reached its original value of $50,000, the engineer decided it was time to cash out. That’s when he realized he could not unlock his Trezor One hardware wallet.

This user had made the mistake of not properly backing up his private keys and could only access the wallet with the pin code password. Unfortunately, he did not remember the pin code and Trezor hardware wallets only allow 16 guesses before it wipes the memory and his wallet would be irrecoverable. 

After 12 unsuccessful guesses with the value of his Theta investment growing to $2m, the engineer decided to reach out to a well-known hardware hacker known as Joe Grand for help. Grand and the engineer discussed the solution for weeks before deciding they would hack the hardware wallet in an attempt to recover the lost funds.

Fortunately for the wallet owner, the Trezor One was an old model that had not been updated in a while. This old model had a security flaw in which the RAM of the hardware wallet could be compromised to release crucial information like the private key.

This security flaw took advantage of how the Trezor Wallet previously updated the firmware. During a firmware update, the hardware wallet would temporarily move the pin and the private key into RAM before moving it back into secure storage. Grand then used a trick that manipulated the voltage going to the chip to gain access to the information inside the RAM.

Grand has posted a guide on his YouTube on how he managed to hack the Trezor One wallet. Trezor was quick to post on Twitter confirming that this issue has long been fixed on newer models. Many hackers were quick to claim that this hack is still technically possible on newer models but was a lot harder to accomplish.

Hardware wallets are still the safest way to store cryptocurrencies. If the physical hardware wallet falls into the wrong hands, it is not bulletproof. This is why having secure copies of your private keys is crucial to keeping your funds safe.

So, with private keys missing, hardware wallet password was forgotten, $2m on the line and only a few password guesses left before the hardware wallet resets and it is all gone. This was a nightmare situation for Grand, and for many hardware wallet owners around the world. Luckily he managed to overcome it… what would you do?

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Updated: 01/27/2022 — 06:00