Bitcoin Core v31.0 Tor feature can expose users’ IPs

Bitcoin Core introduced the optional ‘privatebroadcast’ feature in version 31.0, released in April, to send transactions over the Tor network so recipients do not learn the origin IP. Developers disclosed a privacy bug on June 6 that can break that promise under some network conditions.

The project’s advisory explains that when the client attempts an encrypted Tor connection and the handshake fails, the software may silently retry over a normal clearnet connection. That fallback can reveal the sender’s IP address and an approximate location to the receiving peer. The advisory warned the problem ‘may cause the originator’s IP address to be revealed to the receiving peer under certain network conditions.’ The project wrote that a fix will be released in version 31.1.

A hostile receiving node can deliberately reject the encrypted handshake to force the client into the unencrypted retry. Because Bitcoin’s transaction ledger is public, linking a transaction to an IP address can connect payments to an identifiable person.

The bug affects only users running Bitcoin Core 31.0 who have enabled the ‘privatebroadcast’ option. Standard wallet transactions and users who do not use the feature are not impacted. The discovery is credited to security researcher Eugene Siegel. Developers published the advisory on June 6 and reiterated the forthcoming patch on June 11.

Until version 31.1 is available, the Bitcoin Core Project recommends disabling ‘privatebroadcast’ or routing all client traffic through Tor to prevent the clearnet fallback. The developers said they will include the repair in the 31.1 release to restore the intended private-broadcast behavior.

Market reaction to the disclosure was limited. Bitcoin traded near $63,700 and showed little movement on the day following the advisory.