Zilliqa Suspends Native Transactions After Ledger App Flaw Exposes Private Keys

Zilliqa suspended native transactions after confirming a critical flaw in its Ledger application that can expose private keys through signatures permanently recorded onchain.

The vulnerability affected every version of the Zilliqa Ledger app released since 2019. Suspicious activity appeared on July 19, with the signing flaw isolated on July 21 after ZIL was stolen from a cold wallet operated by an exchange partner.

Accounts that broadcast approximately five or more native Zilliqa transactions through the Ledger app should be treated as compromised. Zilliqa has advised affected holders to wait for its coordinated recovery process rather than attempt independent transfers, which could alert an attacker holding the recovered key.

A corrected Ledger application has been prepared, but installing the update cannot secure keys already exposed through historical signatures. Those signatures remain publicly available, requiring users to retire affected keys and move to newly generated accounts under the recovery plan. Zilliqa has placed protective measures around native transactions while finalizing the migration with Ledger.

Buffer Error Weakens Schnorr Signatures

The flaw sits inside the app’s native Schnorr signature path. A buffer-copy error caused the highest 64 bits of each temporary signing nonce to remain fixed at zero, sharply reducing the randomness protecting each signature.

An attacker collecting about five affected signatures can use lattice-reduction techniques to reconstruct the corresponding private key within seconds on ordinary computing hardware. The attack relies entirely on public transaction data and does not require physical possession of the Ledger device.

Ledger’s core hardware and secure element were not compromised. Native Zilliqa transactions signed through the faulty application were exposed, while EVM-compatible Zilliqa transactions use a different signing process. Software wallets and the zilliqa-js, gozilliqa-sdk and pyzil development tools were also unaffected.

The application-level failure follows renewed scrutiny of the security layers surrounding hardware wallets. Ledger previously faced criticism over software, customer-data and third-party infrastructure breaches, while a recently disclosed Trezor Safe 7 chip flaw did not expose wallet keys.

Upbit Places ZIL Under Review

Upbit designated ZIL as a cautionary asset and suspended deposits and withdrawals while reviewing the security failure. The designation covers its ZIL/KRW and ZIL/BTC markets and could lead to the removal of trading support if the exchange is not satisfied with Zilliqa’s remediation.

ZIL fell to a record low near $0.00235 after the disclosure before recovering toward $0.003. Native transfers remained suspended pending the release of Zilliqa’s key-retirement and balance-migration instructions.

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