A bitcoin wallet security flaw allowed malicious servers to trick users into signing payments to attackers when they tried to speed up transactions, with developers confirming at least one case in which money was stolen.

Electrum, one of Bitcoin's oldest software wallets, disclosed the vulnerability on Saturday, saying some servers were already exploiting it. The developers received two reports in October, including one from a user who lost funds after approving what appeared to be a routine transaction-fee increase.

The attack exploited how Electrum handles bitcoin payments not yet confirmed by the network.

Unlike a full Bitcoin node, Electrum relies on outside servers to retrieve transaction histories and broadcast payments. Before the fix, the wallet trusted those servers to report pending transactions without verifying their signatures.

An attacker controlling one of those servers could intercept a payment before it reached the Bitcoin network and replace it in the wallet's history with a fake transaction. This replacement spent the user's coins to an attacker-controlled address, using invalid signatures that Electrum failed to detect.

But the wallet then showed the fake payment as pending, and the trap set in when users tried to speed things up.

Bitcoin allows unconfirmed transactions to be replaced with versions carrying higher fees, a feature called Replace-by-Fee. If a user selected that option, Electrum could take the fraudulent transaction and sign a valid replacement, sending the coins to the attacker.

In one reported case, the malicious transaction carried no fee at all, making it appear stuck.

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