Multi-asset cryptocurrency wallet Coinomi reportedly has a major security vulnerability, as it has, according to various security researchers, been sending users’ seed phrases in plain text to third-party servers.

Twitter user Warith Al Maawali, who first discovered the vulnerability, claims to have found out about it after losing large amounts of cryptocurrency after adding his recovery phrase to Coinomi. He wrote:

My passphrase was compromised and $60K-$70K worth of crypto-currency were stolen because of Coinomi wallet and how the wallet handled my passphrase.

The vulnerability itself sees the cryptocurrency wallet send users’ seed phrases as non-encrypted plain text to a Google-owned, over a spell check function. Using software that allows the monitoring and debugging of HTTP/HTTPS traffic on applications, Maawali found out about the activity.

To verify the threat, he noted on a website dedicated to the incident that all users have to do is “simply paste any random sentence with [a] spelling mistake in the textbox in Coinomi‘s “Restore Wallet” form/page.” The result, he wrote, is that the error will be underlined in red, after being sent to Google for a spell check.

On Twitter, security researcher Luke Childs published a video showing that Coinomi was indeed sending its users’ seed phrases to Google.

SECURITY VULNERABILITY@CoinomiWallet sends your plain text seed phrase to Googles remote spellchecker API when you enter it! This is not a joke! Video attached for proof. Credit goes to @warith2020 for finding the issue, read more from him here: https://t.co/tCZ0hDPyJ3 pic.twitter.com/hdaPOb84A9 — Luke Childs (@lukechilds) February 27, 2019

Maawali believes his funds were stolen by someone with access to the traffic, or by someone at Google who noticed the seed phrase. The researchers added that other Coinomi wallet users have reported seeing their funds disappear.

Coinomi’s Response

Before making the vulnerability public, Maawali claims to have reached out to Coinomi explaining the situation. Per his words, the team behind the wallet “did not reflect any responsible behavior and they kept asking me about the technical issue behind the bug because they were worried about their public image and reputation.”

Maawali claims Coinomi “kept reminding” him in a threatening way of “the legal implications” of disclosing the vulnerability. He noted they shouldn’t forget about the legal implications of his funds, now gone.

Luke Childs has notably in the past disclosed a vulnerability Coinomi had. The vulnerability transmitted its users’ transactions unencrypted to Electrum servers, without using standard security technology. At the time, the developers reacted defensively, criticizing Childs claiming he spread fear, uncertainty, and doubt (FUD).

Maawali advised those using Coinomi to secure their funds as soon as they can:

To everyone who is using or used Coinomi wallet, make sure to remove your funds from the wallet and change your passphrase by creating a new wallet using another application otherwise your funds might get stolen sooner or later

Available data shows the Coinomi wallet isn’t open-source, meaning its code isn’t available to the public. Some in the crypto community believe these wallets should be avoided, as they can contain hidden security vulnerabilities.