Security News > 2023 > March > Coinbase Wallet 'Red Pill' flaw allowed attacks to evade detection
Coinbase wallet and other decentralized crypto apps were found to be vulnerable to "Red pill attacks," a method that can be used to hide malicious smart contract behavior from security features.
Security researchers at ZenGo Wallet have discovered that dapps, including the Coinbase Wallet, were vulnerable to a new attack that allows smart contracts to hide malicious behavior during transaction simulations.
Threat actors also use smart contracts for malicious reasons, by using them to steal sent crypto or drain a wallet of assets.
As the ZenGo Wallet report highlights, some malicious smart contracts can detect when they are being simulated and demonstrate inauthentic behavior to appear benign or profitable to the target, hence tricking the web3 emulation security system.
"Therefore a malicious smart contract may weaponize this"COINBASE" red pill as follows: Ask users to send some native coin to the contract, if COINBASE is zero the contract will send back some coins in return, thus making the transaction potentially profitable to the user when its wallet simulates it.
By exploring these "Red pill attack" scenarios, ZenGo Wallet found six cryptocurrency wallet dapps vulnerable to exploitation.