Smart Contract Exploit Drains $1.1 Million From Rain Card Users

An attack using an old Rain Card contract happened on August 28, stealing around $1.1 million (roughly Rs. 10.3 crore) from various stablecoin card schemes running on the Solana blockchain network, as per the blockchain security firm Blockaid. Companies like Avici and Tria were victims of the attack. The two companies stated that the losses stood at over $932,800 (roughly Rs. 8.8 crore) across 2,321 users in total. According to Blockaid, other services supported by Rain were affected as well, pushing the estimated damage figure to about $1.1 million (roughly Rs. 10.3 crore). 

Flawed Signature Verification Enabled Unauthorised Collateral Transfers

As per Blockaid, the attacker did not attack customers’ self-custodial wallets or their keys. In fact, the vulnerability exploited was related to the collateral contracts storing stablecoins from deposits into the card balance. Rain also stated that its monitoring systems discovered. Rain stated that its monitoring system found a weakness present in a “small number of programs” employing an older version of its Solana card contract. It was able to upgrade all programs that were still running the vulnerable version, as per its press release. Rain enables crypto companies to launch card products that would be funded via stablecoins. Once users deposit money for their cards, funds get stored in collateral wallets via onchain contracts.

These funds are then separated from assets that are within the customer’s own personal wallets, and after going through the card collateral agreement, the security is purely dependent on the coding of the infrastructure provider and its authorisation controls. Blockaid discovered four deployments that contained code having the same opcode hash as the vulnerable contract. Blockaid stated that the attacker had drained at least two of the deployments, while the remaining two had the same flaw and had not suffered any loss.

However, the old Rain contract required two separate verifications for particular account operations. Solana’s Ed25519 instructions were used to verify the required signatures. Although, according to Blockaid’s findings, the second verification was tampered with by the attacker. This verification’s signature, public key, and message offsets referenced the data of the first verification instruction. Thus, the insecure contract took a single signature controlled by the attacker as two separate signatures. This made it possible for the attacker to meet the authorisation criteria without the consent of the owners of the collateral accounts. 

This is another example of where vulnerable and old infrastructures continue to operate. Verus Protocol’s Ethereum bridge was reportedly exploited in May in a similar way. The incident happened when a hacker was able to fraudulently transfer out at least $11.5 million (roughly Rs. 108 crore) in cryptocurrency through a fake cross-chain transfer message. Blockaid stated that its detection system had caught this ongoing exploit on the Verus-Ethereum bridge.