On Friday and Saturday, a series of events unfolded as a 13-block reorganization occurred on the Litecoin network, effectively reversing approximately 32 minutes of network activity. This was in response to an attack that leveraged a vulnerability within the Mimblewimble Extension Block (MWEB) protocol, allowing invalid transactions to bypass nodes that had not been updated. The bug enabled a denial-of-service attack against major mining pools, permitting the invalid MWEB transactions to temporarily evade detection before the network's longest valid chain corrected them. Following the incident, Litecoin Core v0.21.5.4 was released, with all users advised to upgrade due to important security updates.
The Litecoin Foundation announced on Sunday morning that the bug had been fully patched and the network was operating normally. However, security researchers have pointed out discrepancies in the timeline of events, suggesting that the vulnerability was known and privately patched between March 19 and March 26, roughly four weeks before the attack.
The consensus vulnerability that allowed the invalid MWEB peg-out was privately addressed during this period, but the fix had not been publicly disclosed or mandated for all mining pools, creating a window of vulnerability. This window allowed attackers to target nodes running the vulnerable version of the code, while others ran the patched version.
The attack involved a pre-funded wallet, a Binance withdrawal, and a subsequent swap of LTC for ETH on a decentralized exchange. The denial-of-service attack and the MWEB bug were separate components, with the former designed to take patched mining nodes offline, thereby allowing unpatched nodes to form a chain that included the invalid transactions. The automatic handling of the 13-block reorganization by the network once the DoS stopped suggests that enough hashrate was running updated code to eventually overpower the attack.
The incident highlights the differences in how various networks respond to exploits, with newer chains capable of coordinating upgrades quickly and older proof-of-work networks like Litecoin and Bitcoin facing challenges due to independent mining pools choosing when to upgrade.