Hackers From China are Using Backdoor Web3 Wallets

Chinese hackers are zeroing in on Android and iOS users with the distribution of Web3 wallets that are backdoored. The hackers are attempting to steal money using the backdoored apps in a creative way. This unique attack is yet another reminder of the importance of updating digital safeguards against the latest online threats. Let’s take a closer look at what the backdoor Web3 wallet attack is all about.

Who is Responsible for the Backdoor Web3 Wallet Threats?

The use of Web3 wallets featuring backdoor code is a strategy employed by the threat actor referred to as SeaFlower. The SeaFlower hackers are using a highly complex hacking campaign to replicate seemingly legitimate crypto wallet sites. However, the hackers’ underlying aim is to transmit backdoor apps that deplete funds from victim accounts.

When was the new Threat Discovered?

The threat was initially identified in the spring of 2022. Digital security specialists identified what has been described as a “cluster” of online activity, some of which appear to be connected to China. 

However, the digital forensics specialists investigating the attack have not yet figured out exactly who is behind the threat.

Why do Digital Security Specialists Believe the Threat is From China?

Though a relationship between the hackers and a Chinese-speaking entity has not yet been officially revealed, it appears as though there is a link to China. The digital security professionals analyzing the digital attack believe there is a connection between the hackers and China due to the analysis of the manipulation of the China-based Alibaba CDN. 

CDN is an acronym short for Content Delivery Network. Furthermore, source code comments made in Chinese within the backdoor code and the macOS usernames tied to the activity also indicate there is likely a link to China.

What is the Overarching Aim of the Web3 Wallet Backdoor?

The ultimate goal of the backdoor Web3 wallet attack strategy is to alter the Web3 wallets with the backdoor code to exfiltrate seed phrases. The campaign zeroes in on iOS and Android versions of crypto and digital wallets ranging from the Coinbase Wallet to imToken, TokenPocket, and more.

SeaFlower’s signature approach to stealing information is establishing a cloned site that functions as a bridge to obtain wallet apps with trojans. The cloned site does not change when compared to the original but for implementing new code meant to obtain the seed phrase, transmitting it to a remote domain.

SeaFlower also wreaks havoc by targeting iOS users with the provisioning of profiles. The provisioned profiles set the stage for the side loading of apps onto devices. This approach to digital theft relies on search engine optimization poisoning implemented across search engines commonly used by Chinese residents, including Sogou and Baidu. When sleuths search for certain phrases, specific harmful download pages are pushed toward the top of the results in an attempt to trap the target into clicking the link and assuming it is legitimate when the truth is the underlying goal is to steal information.