A critical security flaw is causing concern in the cryptocurrency community, particularly impacting Bitcoin wallets that utilize the China ESP32 chip. This vulnerability poses a significant threat to traders as it could result in the theft of private keys, potentially putting millions of dollars in digital assets at risk worldwide.
The ESP32 chip, manufactured by Espressif Systems, a prominent Chinese technology firm, has become widely used in various hardware wallets designed to secure Bitcoin and other cryptocurrencies due to its cost-effectiveness and adaptability in embedded systems. The Blockstream Jade Plus wallet hardware has also incorporated the new ESP32-S3 chipset for smooth functionality.
Although popular, cybersecurity experts have identified a serious vulnerability known as CVE-2025-27840 associated with the ESP32 chip. This flaw allows hackers to circumvent security measures and extract private keys. Another significant Crypto-MCP vulnerability could enable hackers to reveal seed phrases or reroute blockchain transactions without detection by the user.
Expert analysis by Crypto Deep Tech reveals that this vulnerability permits attackers to falsify ECDSA signatures, subsequently facilitating unauthorized transactions that users may not detect. The warning from Crypto Deep Tech underscores that attackers have various methods to access private key data of Bitcoin wallets that use ESP32.
In a test, researchers successfully exploited this vulnerability to access a Bitcoin wallet holding 10 BTC, underscoring the potential for substantial financial losses. The chip's Bluetooth and Wi-Fi connectivity heightens the risk as it enables hackers to remotely extract sensitive data and deploy malicious updates. This risk is particularly concerning for Electrum-based wallets.
The implications of this vulnerability extend beyond individual investors, eliciting broader concerns about overall network security. Experts caution that it could potentially enable state-sponsored espionage operations and coordinated theft schemes targeting devices reliant on ESP32.
The discovery of this flaw has sparked discussions regarding the trustworthiness of Chinese-manufactured components in critical financial infrastructure. Some users advise against using ESP32-based hardware wallets for single sig to mitigate risks.
While specific affected wallet models have not been widely disclosed to date, there is a growing urgency for manufacturers to be transparent and reveal impacted products to minimize risks and safeguard users.