Predictable Wallet Recovery Phrases Linked to at Least $5.69M in Crypto Theft

Crypto users have lost at least $5.69 million in thefts that can be traced to attackers reconstructing predictable wallet recovery phrases, according to security firm Coinspect. Coinspect said it identified the weakness in RRWallet, Bexo Wallet, NanChat, Bitcoin Libre, and Milo, noting the list of affected software may be incomplete. Exposure depends on the specific software version that generated a recovery phrase, not solely the wallet brand. The firm traced roughly $3.14 million drained on May 27. Another $2.55 million was taken between May 30 and July 13. A third wave removed about $40,000 between July 20 and 21 from wallets using the Chinesemnemonic subset. Coinspect's review covered more than 2,000 recovery seeds. The activity spanned Bitcoin, Ethereum, Tron, Rootstock, and Polygon. Coinspect emphasized the $5.69 million total is a lower-bound estimate of overall losses. At the center of the issue is a weak random-number generator in the CryptoJS library used in the wallets' seed-generation flow. Coinspect said the vulnerable implementation dates back to June 2014 and shrank expected search spaces of 2^128 or 2^256 possibilities to roughly 2^39 and 2^47. That reduction allows attackers to enumerate affected phrases, derive blockchain addresses, and scan those addresses for balances. Coinspect said the presence of an older CryptoJS dependency alone does not prove a wallet is exposed; the vulnerable function must have been used to generate the wallet secret. It also warned that updating an app cannot fix a recovery phrase created with insufficient randomness, and importing the same phrase into other software or hardware wallets does not eliminate the underlying weakness. Remediation steps vary by product. Bexo fixed the generation path in version 20.1.0, NanChat in version 1.3.0, and Bitcoin Libre in version 4. RRWallet and Milo have been discontinued. NanChat advised users who created wallets before version 1.3.0 to treat them as compromised and migrate to a newly generated phrase. Coinspect also released a tool, Unlukey, that lets users check public blockchain addresses against known exposed datasets without submitting private information. A match suggests potential exposure; a negative result only indicates the address was not found in the published data. Users who confirm they are affected are advised to securely generate a new recovery phrase and move any funds controlled by the old one.