Introduction
Blockchain technology has revolutionized finance, bringing digital currencies into mainstream awareness. As adoption grows, securing digital wallets—whether hot (online) or cold (offline)—has become critical. This whitepaper outlines security risks and best practices for wallet developers and users, leveraging 360 Security Lab's threat analysis and industry insights.
Section 1: Current Security Landscape of Wallet Apps
Key Vulnerabilities Identified
- Unencrypted Wallet Storage: Some apps store wallet files locally without encryption, allowing attackers to extract sensitive data (e.g., mnemonics, root keys) via reverse engineering.
Runtime Environment Risks:
- Screen recording/capturing during mnemonic entry
- Janus signature flaws enabling app tampering
- Weak certificate validation in HTTPS communications
Top 5 Threats:
- Unauthorized screen capture
- Transaction address tampering
- Weak password policies
- Insecure local data storage
- Missing root/jailbreak detection
Section 2: Hot Wallet Security Audits
2.1 App-Side Vulnerabilities
Runtime Security
- System Vulnerability Scans: Detect unpatched OS flaws.
- Root/Jailbreak Detection: Prevent debugger attacks.
- App Integrity Checks: Block repackaged malware.
Data Protection
- Mnemonic Generation: Validate anti-screen recording.
- Key Storage: Enforce AES-256 encryption + hardware-backed keystores.
- Local Data: Sanitize sensitive cached information.
Transaction Safety
- Address Verification: Double-check recipient addresses via QR/checksum.
- Secure HTTPS: Enforce certificate pinning.
2.2 Server-Side Risks
Infrastructure
- DNS Security: Use DNSSEC; monitor for hijacking.
Cloud Configurations:
- Restrict IAM permissions
- Isolate VPC environments
- Encrypt S3 buckets
Application
- Code Audits: Regular SAST/DAST scans.
- Environment Isolation: Microservices architecture.
Section 3: Cold Wallet Security Evaluations
Hardware-Specific Threats
- Physical Tampering: Chip extraction via debug interfaces.
Firmware Risks:
- Lack of OTA integrity checks
- Unencrypted NAND storage
Critical Controls:
- Secure element chips (e.g., TPM)
- Multi-factor authentication
- Remote wipe capabilities
Section 4: Risk Classification
| Vulnerability | Severity | Impact Example |
|---|---|---|
| Mnemonic screen capture | Critical | Direct fund theft |
| Weak transaction passwords | High | Brute-force attacks |
| DNS spoofing | Medium | Phishing/redirects |
| Unencrypted cloud backups | Medium | Mass data breaches |
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FAQs
Q: How often should wallet apps update their security protocols?
A: Quarterly audits + immediate patches for critical CVEs.
Q: Are hardware wallets immune to phishing?
A: No—always verify addresses on-device before signing transactions.
Q: What’s the #1 mistake in wallet app design?
A: Storing keys/mnemonics in plaintext or weak encryption.
Conclusion
Digital wallet security demands proactive measures—from code hardening to user education. As threats evolve, continuous monitoring and zero-trust architectures are non-negotiable.
Authored by 360 Security Lab, pioneers in blockchain threat intelligence.
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