Bitcoin rises toward $65,000 as fresh security risks hit infrastructure

Investing.com -- Bitcoin traded just below $65,000 on Saturday, gaining slightly over the 24 hours, as investors assessed a critical BTCPay Server vulnerability and the risk of replay attacks from a possible BIP-110 chain split.

Attackers exploited a flaw in BTCPay Server late Friday to steal credentials controlling Lightning nodes running LND, software used to process fast, low-cost Bitcoin payments. Bitcoin was trading up 0.61% at $64,986.0 as of 04:54 ET (08:54 GMT).

BTCPay confirmed that funds had been stolen and urged affected operators to update immediately to version 2.4.2 or take their servers offline. The project has not disclosed the number of victims or the amount of Bitcoin lost.

The vulnerability allowed unauthenticated attackers to obtain "macaroon" files, credentials granting access to LND nodes. Those files could then be used to control Lightning wallets, close payment channels and transfer funds.

Hardware wallet maker Foundation said attackers drained its BTCPay Lightning node but did not reach its on-chain hot wallet. Bitcoin publication Citadel21 also reported losing funds from a Lightning node.

Standard on-chain wallets generated within BTCPay were not affected. Still, funds held in an LND node's on-chain wallet may be exposed. A detailed account of the incident is expected after operators have had time to install the patch.

Bitcoin holders also face a separate risk from the proposed BIP-110 fork, which could begin around block 961,632 this weekend. The proposal would temporarily restrict non-payment data stored in Bitcoin transactions.

Miner signalling was near 2.6% on Friday, far below the proposal's 55% threshold. Yet computers running BIP-110 software are programmed to reject non-signalling blocks once the activation height is reached, potentially creating a minority chain.

If a split occurs, holders would initially have equal balances on both chains. Selling the forked coins could expose real BTC to replay attacks, as the same signed transaction may be valid on both networks. Developer Kevin Loaec advised holders who cannot separate the balances to leave them untouched.

Elsewhere, XRP Ledger version 3.3.0 proposed confidential transfers for institutional tokenised assets. The feature would encrypt balances and payment amounts while allowing selective access for issuers, auditors and regulators. It requires 80% validator support for two consecutive weeks before activation.

Looking at broader crypto prices, most altcoins mirrored Bitcoin's gains for Saturday.