Bitcoin wallet bug let rogue servers steal funds when users tried to speed up payments

What it is

Electrum, a Bitcoin software wallet, disclosed on 24 October 2026 that malicious servers were already exploiting a missing signature check on unconfirmed transactions. Version 4.8.3, released the same day, adds the check. CoinDesk reports at least one confirmed theft. The developers have not disclosed the amount stolen or named the malicious servers.

How it works

Electrum depends on outside servers for transaction history and broadcasting. Before 4.8.3 it accepted pending transactions from those servers without validating their signatures. A malicious server could intercept a payment before it reached the Bitcoin network and show the wallet a fake transaction in its place. The fake spent the user's coins to an attacker address, with invalid signatures.

The theft happened at the fee bump. If the user chose Replace-by-Fee on the fake transaction, Electrum signed a valid replacement that paid the attacker.

Two details made the fake easy to miss:

• In one case the fake carried no fee, so it looked stuck and invited a fee bump.
• Attacker addresses were generated so the last four characters matched the legitimate destination, which defeats a quick visual check.

Preconditions / Affected

• Electrum versions before 4.8.3, connected to a malicious server.
• Users connected only to servers they trust, including their own, were not exposed.
• The first report (11 October) came from a user with a 2-of-3 multisig wallet using two Trezor devices. The user had verified the real payment on both devices, then noticed a different outgoing transaction in the history. That user did not report losing funds.
• The second report (18 October) came from a user who raised the fee on a substituted transaction and lost money.

What to do

• Upgrade to Electrum 4.8.3.
• Before signing any payment, including a fee bump, check the full receiving address and the amount. Do not rely on the last few characters.
• Use only servers you trust, or run your own.

Caveats

• The 4.8.3 fix covers unconfirmed transactions that spend coins from the user's own wallet. CoinDesk does not say whether other transaction types are affected.
• CoinDesk says earlier versions remain vulnerable when connected to malicious servers.
• The article does not say how many users or servers were affected. It does not say whether the multisig user's hardware-device checks would have caught the fee-bump substitution.