A critical security vulnerability is raising alarms in the crypto community, particularly affecting Bitcoin wallets that rely on the China ESP32 chip.
This flaw poses a significant risk to traders. It could potentially lead to the theft of private keys and jeopardize millions of dollars in digital assets worldwide.
Bitcoin Wallets at Risk with ESP32 Chip
The ESP32 chip is crafted by Espressif Systems, a leading Chinese technology company. Thanks to its cost-effectiveness and adaptability in embedded systems, it has gained widespread adoption in various hardware wallets designed to safeguard Bitcoin (BTC) and other cryptocurrencies.
The hardware of Blockstream Jade Plus wallet has also integrated the new ESP32-S3 chipset, intended for seamless operation.
Despite its popularity, cybersecurity experts have uncovered a severe vulnerability identified as CVE-2025-27840. This vulnerability enables hackers to bypass security protocols and extract private keys. Another critical Crypto-MCP flaw could let hackers expose seed phrases or redirect blockchain transactions without user detection.
According to an in-depth analysis by Crypto Deep Tech, this vulnerability allows attackers to forge ECDSA signatures. After that, hackers can facilitate unauthorized transactions that users cannot detect.
“Attackers can use various methods to gain access to the private key data of Bitcoin wallets through ESP32,” Crypto Deep Tech warned.
In a real-world test, researchers successfully exploited this vulnerability to access a Bitcoin wallet holding 10 BTC, highlighting the potential for significant financial losses. The chip’s Bluetooth and Wi-Fi connectivity exacerbates the risk, allowing hackers to deploy malicious updates and remotely extract sensitive data. This concern is especially acute for Electrum-based wallets.
The repercussions of this vulnerability extend beyond individual investors, raising broader concerns about comprehensive network security. Experts caution that it could enable state-sponsored espionage campaigns and coordinated theft operations targeting devices dependent on ESP32.
The discovery of this flaw has ignited debates about the reliability of Chinese-manufactured components within critical financial infrastructure.
“I wouldn’t use ESP32 based hardware wallets for single sig,” cautioned X user nvk
No specific wallet models have been broadly identified as affected so far. Nevertheless, the push for manufacturers to provide transparency and disclose impacted products is becoming increasingly urgent to mitigate the risks and protect users.
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Source: https://beincrypto.com/esp32-chip-flaw-threatens-bitcoin-wallets/