Lightning apps using unpatched LDK risk Bitcoin theft from a reconnect lie

Lightning Development Kit (LDK), a library for building Bitcoin Lightning wallets and payment applications, has patched a flaw that could let a malicious channel peer steal the value of a forwarded payment by lying after reconnecting. Affected application developers need to incorporate the fix into the software they deploy.

The October 1-dated v0.2.7 and v0.1.13 security releases address the LDK reconnect vulnerability on the 0.2 and 0.1 branches, respectively. Bitcoin Optech described the fixes in its Oct. 9 newsletter.

How the LDK reconnect flaw could cost Bitcoin

The attack starts with a channel peer acknowledging an update, then reconnecting and pretending it never received it. Before the fix, that false claim could cause LDK to sign a conflicting commitment transaction.

A commitment transaction represents a channel's agreed state and can be used to settle it on Bitcoin's blockchain. In the scenario described in PR 5057, the newly signed transaction was not recorded by LDK's channel monitor, the component tracking the channel's on-chain claims.

That gap could turn a forwarded payment into a loss. The malicious sender could confirm the transaction on-chain and let the payment settle with the next recipient. It could then reclaim the incoming payment contract when it expired, even though the forwarding node knew the secret normally used to claim payment.

The forwarding application would have paid downstream without recovering the corresponding incoming funds. The fix permits retransmission only while the peer's acknowledgment remains outstanding and force-closes the channel when the peer claims an already-acknowledged update was missed.

Alongside the LDK reconnect fix, version 0.2.7 addresses a different theft path involving LSPS2 just-in-time payments, where a liquidity service opens a channel as part of handling a payment.

An intercepted payment could misrepresent its amount, causing the service to open a channel and forward more Bitcoin than the incoming payment supplied. The service would cover the difference from its own funds. PR 5042 addresses that amount check.

That exposure concerns the LSPS2 service flow. The v0.1.13 notes list the shared reconnect fix without listing the LSPS2 fix.

These defects differ from the splice-fee diversion and saved-state loading bugs covered in CryptoSlate's Sept. 13 LDK v0.2.6 report. Core Lightning is a separate implementation, as described in the update below.