Crypto Project Everest: Cracking the wallet of 7,002 Bitcoins, a treasure hunt worth US$235 million

Original author:Andy Greenberg, Wired

Original compilation: Felix, PANews

In late September of this year, a hacker calling himself Tom Smith sent a meaningless text message to Andy Greenberg: query voltage recurrence

But these three words prove a remarkable feat and potentially extremely valuable. Just a few days ago, Andy Greenberg randomly generated these words and set them as passwords for a certain model of encrypted USB flash drive (IronKey S 200), which he then handed over to Tom Smith and his team at Seattle-based startup Unphered. .

Unciphered Seattle Lab employees

Smith told Andy Greenberg that deciphering the code could take days. In fact, guessing the password should be impossible because IronKeys is designed to permanently delete its contents after just 10 incorrect password attempts. But Unphereds hackers developed a password-cracking technique that allowed them to try an unlimited number of passwords (a technique they declined to describe in detail to Andy Greenberg or anyone outside the company). Therefore, the morning after Andy Greenberg’s wallet arrived at Unphered Labs, he was surprised to find that the three-word password had been sent. Smith told Andy Greenberg that the process took just 200 trillion attempts with the help of high-performance computers.

Smith demonstrated no simple hack, which he and his team had spent nearly eight months developing, to crack this particular, decade-old IronKey model. The reason for development is also very special. In a Swiss bank vault 5,000 miles east of the Seattle laboratory, there is a wallet containing 7,002 Bitcoins. The wallet is also an IronKey model hard drive and is worth nearly 235 million at the current exchange rate. Dollar.

The owner of this wallet is Stefan Thomas, a Swiss crypto entrepreneur living in San Francisco. The nine-figure fortune it contained was inaccessible because Thomas lost the password. Thomas revealed in an interview that he had already guessed wrong eight times and only had two more chances to try. Once it failed IronKey would delete the keys stored on it, forever losing access to his Bitcoins. As a result, Thomas has been on the radar of many in the hacker and crypto community at Unphered for years.

Unciphered lab screens showing a microscopic image of the IronKey controller chip layout (left) and a CT scan of the drive

After months of hard work, Unphered’s hackers say they are ready to use their secret cracking techniques to crack the wallet. We were hesitant to contact him until we had a complete, demonstrable, reliable approach, Smith said. Smith asked that his real name not be used when speaking to Wired because of the sensitivity of using secret hacking techniques and huge amounts of cryptocurrency.

Possessing the ability to decrypt wallets but was caught first

Earlier this month, shortly after proving their decryption capabilities to Andy Greenberg, Unphered contacted Thomas through a mutual friend who could vouch for and help with Unphereds IronKey unlocking capabilities. But Thomas politely declined, and the Unphered commission wasn’t even discussed on the phone call.

In this regard, Thomas explained that as early as a year ago, he had reached a cooperation agreement with two other excellent teams. In order to prevent two teams from competing, he proposed that if one party could unlock the hard drive, they could share a portion of the proceeds. Even a year later, he promised to give the teams more time to figure out the problem before inviting others to decipher it. While neither team has shown any signs of decryption, Unphered has demonstrated that it has decryption capabilities.

This also puts Unphered in an awkward position: Unphered has perhaps one of the most valuable lock picking tools in the crypto world, but no lock to pick. We cracked IronKey, but now we have to crack Stefan Thomas, said Nick Fedoroff, director of operations at Unphered. Thats proven to be the hardest part.

Thomas confirmed in an email to Wired that he declined Unphereds offer to decipher it for him. Thomas wrote: Ive already worked with different experts, so I can no longer freely work with others. If the current team feels that working with others is the best option, they may decide to subcontract the deciphering work, but Now you have to wait.

Because of the Everest Project started by Thomas

Thoma revealed in past interviews that he received 7,002 Bitcoins while filming a video titled What is Bitcoin? in early 2011, when one Bitcoin was worth less than $1. But later that year, Thoma inadvertently deleted two backup copies of the wallet and lost the keypad for a third copy stored on IronKey, but he lost nearly $140,000 worth of tokens. I spent a week trying to get it back and it was very painful.

In the 12 years since, the value of the Bitcoin in Thomas’ wallet has risen to nearly $500 million at one point. In January 2021, as Bitcoin began to approach its peak price, Thomas described to The New York Times the anxiety that years of long-lost passwords had caused him. “I would lie in bed thinking about it, and then I would go on the computer and come up with new strategies and they wouldn’t work, and I would feel hopeless again.”

Around the same time in 2021, a group of cryptographers and white hat hackers founded Unphered with the goal of unlocking the wallets of cryptocurrency holders like Thomas. At the time Unphered was officially launched, cryptocurrency tracking firm Chainalysis estimated the total value of wallets with lost passwords at $140 billion. Unphered said that since then, the company has successfully helped customers open wallets worth millions of dollars — often by finding cryptographic vulnerabilities or software flaws in crypto wallets — though the amounts are nowhere near as high as Thomass IronKey wallet.

Unciphered Laser Cut Deconstructed IronKey

It wasnt until early 2023 that Unciphered began looking at potential ways to unlock Thomas IronKey. Smith said they soon discovered that the maker of IronKey, which was sold to storage hardware company iMation in 2011, left them with some potential opportunities.

Even IronKey from a decade ago was a formidable target for hackers. Developed in part with funding from the U.S. Department of Homeland Security, the USB drive is FIPS-140-2 Level 3 certified, meaning it is tamper-proof and the encryption technology is secure enough to even be used for classified information from military and intelligence agencies. . But Unphered still found signs of some security vulnerabilities in the wallet, but Thomas wallet had not been cracked, so Unphered decided to crack it. If you want to climb Mount Everest, this is it. Eventually, Unphered became a network of about 10 people. A team of employees and outside consultants, some with backgrounds working for the National Security Agency or other third-level government agencies, called the IronKey wallet decryption Project Everest.

Unphereds first step was to filter and determine the exact model of Thomas IronKey based on time. To this end, they bought all IronKey models that were more than ten years old, and have accumulated hundreds of them in the laboratory.

To fully reverse engineer the device, Unphered scanned an IronKey with a CT scanner and began deconstructing it. Using precise laser cutting tools, Unphered cut out the Atmel chip, which is IronKeys secure area where passwords are held. They then soaked the chip in nitric acid to remove the tamper-proof epoxy layer and polished the chip using a silica abrasive solution and a rotating felt pad. As each micron of material is removed from the surface of the chip, they take photos of each layer using an optical microscope or scanning electron microscope, and then repeat the process until a complete 3D model of the processor can be built.

Efficiency is increased because the chips read-only memory (ROM) is built into its physical wiring. Unphereds visual model therefore gives it a head start in deciphering much of the logic of IronKeys encryption algorithm. But the team didnt stop there, installing tenths of a millimeter of wire at the connections of the secure element to eavesdrop on communications going to and from the element. They even approached engineers who had worked on the Atmel chip and another IronKey microcontroller to ask for details about the hardware. It feels like a treasure hunt. You follow a faded, coffee-stained map, and you know theres a pot of gold at the end of the rainbow, but you dont know where the rainbow will take you, said Nick Fedoroff, director of operations at Unciphered. road.

The cracking process culminated in July of this year. At that time, the Unphered team gathered at an Airbnb hotel in San Francisco, and a team member decrypted the contents of IronKey for the first time.

But Unphered has not disclosed its full research process, nor any details about the counter technology it used to eventually crack IronKey and defeat the password attempts it limited. In response, the company said it is still possible that the vulnerabilities they discovered are too dangerous to be made public. Because the IronKeys models they cracked are too old to be patched with software updates, and some may still store confidential information. If this information were somehow leaked, the national security implications would be much greater than crypto wallets.

However, Unphered also revealed that the final method they developed does not require any intrusive or destructive tactics and has been used to unlock 2011 IronKeys more than a thousand times without causing damage.

Skeptical about the progress of Thomas cooperation team, plans to issue an open letter to persuade

However, none of these results convinced Thomas of Unphered. Unphereds hackers said they learned from intermediaries who contacted Thomas on their behalf that Thomas had been in contact with two other parties in the encryption and hardware hacking world: cybersecurity forensics and investigation firm Naxo and independent security researcher Chris Tarnovsky.

Naxo declined a request for comment. However, Chris Tarnovsky, a well-known chip reverse engineer, confirmed to Wired magazine that he had a phone meeting with Thomas in May last year. During that communication, Thomas told him that if he could successfully unlock IronKeys, he would Compensation was given generously but no fees or commissions were specified. Hes done little work on the project since then, essentially waiting for Thomas to pay him monthly for his initial research. I wanted Thomas to pay some money upfront because I work a lot and have my mortgage and bills to worry about.

But Chris Tarnovsky also said that he hasnt heard from Thomas since the first call. Nothing has come out of it, which is weird.

Nick Fedoroff, Director of Operations, Unciphered

The Unciphered team remains skeptical of Naxos progress. They believe that only a handful of hardware hackers have the ability to perform the reverse engineering required to crack IronKey, and none appear to be working with Naxo. Regarding Thomass suggestion that the project be subcontracted to Naxo or another team, Fedoroff said, Its not ruled out, but it doesnt make sense when Unciphered can crack IronKey alone. Based on what we know, this option is not feasible. It does no one any good.”

Thomas, meanwhile, appears to be displaying an unusual lack of urgency when it comes to unlocking $235 million. Thomas gave only vague hints as to why, saying, “When you’re dealing with that much money, everything takes a long time.” He told the Thinking Crypto podcast this summer: “You need to sign contracts with collaborators and The contract must be clear and clear because hundreds of millions of dollars are at stake if anything goes wrong.”

To speed things up, Unphered plans to release an open letter to Thomas and a video in the coming days aimed at convincing him to cooperate. But Fedoroff also acknowledged that Thomas may not actually care about money. The New York Times wrote in a 2021 article that Thomas already had wealth he didnt know what to do with thanks to other crypto ventures.

Fedoroff also noted that its impossible to know exactly what was hidden in Thomas IronKey. Perhaps the password to the 7,002 Bitcoins was hidden somewhere else, or disappeared entirely.

While Unphered remains hopeful, the team is prepared to move on if Thomas doesnt cooperate. After all, there are other wallets waiting for the company to crack. Whether and how to unlock this particular USB drive will ultimately be up to its owner. Its very frustrating, Fedoroff said. Humans are unpredictable creatures and dealing with people is always the most complicated, but code doesnt change and circuitry doesnt change unless you make it change.