Late Friday and Saturday, a series of events unfolded as a 13-block chain reorganization occurred on the Litecoin network, effectively rewinding 32 minutes of activity. This was in response to a denial-of-service attack that leveraged a vulnerability in the Mimblewimble Extension Block (MWEB) protocol, enabling invalid transactions to bypass nodes that had not been updated.
The bug was exploited to launch a denial-of-service attack against major mining pools, allowing the invalid MWEB transactions to temporarily bypass nodes that had not updated, before the network's longest valid chain corrected them. Following the incident, Litecoin Core v0.21.5.4 was released, advising all users to upgrade due to important security updates.
The Litecoin Foundation announced on Sunday that the bug had been fully patched and the network was operating normally. However, security researchers point out that the timeline of events, as shown in the litecoin-project GitHub repository, indicates the consensus vulnerability was known and privately patched between March 19 and 26, roughly four weeks before the attack.
A separate denial-of-service vulnerability was patched on April 25, with both fixes rolled into release 0.21.5.4 after the attack had begun. The definition of a zero-day refers to a vulnerability unknown to defenders at the time of an attack, but in this case, the consensus vulnerability was known and patched privately a month before the exploit.
This created a window where some miners ran the patched code while others ran the still-vulnerable version, and the attackers appear to have known which was which. Concerns have been raised by Alex Shevchenko, CTO of NEAR Foundation's Aurora project, regarding the exploit. Blockchain data revealed that the attacker pre-funded a wallet 38 hours before the exploit through a Binance withdrawal, with the destination address already set to swap LTC into ETH on a decentralized exchange.
The denial-of-service attack and the MWEB bug were separate components, with the DoS designed to take patched mining nodes offline so the unpatched ones would form the chain that included the invalid transactions. The fact that the network automatically handled the 13-block reorganization once the DoS stopped suggests enough hashrate was running updated code to eventually overpower the attack, but only after the unpatched fork had run for 32 minutes. This incident highlights the differences in how attacks on various networks are handled, with newer chains being able to coordinate upgrades quickly and older proof-of-work networks like Litecoin and bitcoin relying on independent mining pools to choose when to upgrade.
The Litecoin Foundation has not publicly addressed the GitHub timeline as of Sunday morning, and the amount of LTC pegged out during the invalid block window and the value of any swaps completed before the reorganization reversed them have not been disclosed.