Monero (XMR) diffused a bug that could have led to a loss of faith in the network, the loss of funds and a hypothetical opportunity for double-spending. Known as “the burning bug”, this part of the protocol allows the sending of funds to a stealth address multiple times, which then blocks the coins from ever being spent again.
As explained by the Monero team, if the exploit uses a regular address, the funds are only burned. However, exchange wallets are vulnerable, because exchanges immediately fund a balance of XMR for trading, while inside the wallet, the actual funds are unspendable. In a recent blog, the bug is explained fully:
“An attacker first generates a random private transaction key. Thereafter, they modify the code to merely use this particular private transaction key, which ensures multiple transactions to the same public address (e.g. an exchange's hot wallet) are sent to the same stealth address. Subsequently, they send, say, a thousand transactions of ...
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