Attackers exploit 'Ill Bloom' wallet flaw to drain $3.1 million from cryptocurrency wallets

Attackers have drained $3.1 million from cryptocurrency wallets by exploiting a newly disclosed Ill Bloom vulnerability, The Hacker News reports today. Security firm Coinspect says the flaw stems from weak randomness in how some wallets generated recovery phrases, letting thieves reconstruct seeds and seize funds. Coinspect adds that exploitation is active and confirms a coordinated sweep in May.

The issue appears limited to wallet software that used insufficient entropy during mnemonic generation, though affected vendors have not been identified, according to The Hacker News. Investigators are tracing on-chain movements tied to the drains, and users are urged to migrate assets to new wallets with freshly generated phrases, Coinspect advises. Watch for wallet makers to issue advisories, patches, and scope assessments, as well as any attribution of the threat actors. [Developing. This article will be updated.]