Developers behind the privacy-focused cryptocurrency Beam have revealed that the "critical" bug discovered and subsequently fixed in their wallet software last week could have put user funds directly at risk.

As stated in a Medium post published today, the vulnerability would have allowed an attacker to create “modified transactions” and subsequently send funds directly into the attacker's wallet.

In an exclusive interview with CoinDesk, Beam CTO Alex Romanov explained that by leveraging Beam’s Secure Bulletin Board System (SBBS) – a custom-built system to enable offline encrypted messaging between Beam wallets – attackers “currently listening in on active SBBS addresses … would be able to cause these wallets to send money to an attacker.”

Romanov stressed that the issue was application-specific and in no way related to the privacy-enhancing technology mimblewimble, saying:

And though the existence of the vulnerability was disclosed to the public the same day it was found by Beam’s internal development team, the exact nature of the threat was not made public until today.

The reason for this according to Romanov was to prevent opening up any “possible attack vectors” for users who had not seen the announcement of the vulnerability last Wednesday.

Elaborating that people are “not online all the time, sometimes there are time differences, people may be asleep,” Romanov told CoinDesk that withholding further details was a way to buy time for users “especially pools and exchanges” to implement the code fix.

Speaking to the issued patch, Romanov explained that the fix was relatively simple.

“We have just prevented this specific scenario in which this custom transaction would have been accepted by a running wallet and that’s it,” said Romanov to CoinDesk.

Beam officially launched on Thursday, January 3. Since that point, Romanov said that feedback from users is already being worked into a new upgrade for the Beam software currently being tested and set for release “in the next couple days."

“We have taken into consideration all the issues raised by users, all the requests, all the misunderstanding that in retrospect was pretty obvious because mimblewimble is a very new technology … and we have created an update which will improve the user experience,” said Romanov.

Calling it version 1.0.1, Romanov highlighted that use of Beam systems as a result of mimblewimble has caused “pools and also exchanges to significantly modify the way they operate and the way they handle transactions.”

“There were a lot of learning curves from all sides … [The update] will reduce the amount of potential misunderstandings or problems. Sometimes, even though the system functions properly, it’s not clear for the [user] what is happening," Romanov told CoinDesk:

Wallet image via Shutterstock

This article and its headline have been updated for clarity.