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This audit report contains critical security findings that require immediate attention before production deployment.
Date: August 5, 2025
Auditor: Claude (Senior Security Auditor)
Scope: Comprehensive security assessment of the MPC vault system for wallet operations
Version: Sonr v0.10.15

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Executive Summary

This security audit evaluates the Multi-Party Computation (MPC) vault system implemented in Sonr’s blockchain platform. The audit covers the current architecture, recent security improvements, wallet operation security, threat analysis, and production readiness assessment.

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Key Findings Overview

  • Critical Issues: 3 identified
  • High Risk Issues: 4 identified
  • Medium Risk Issues: 6 identified
  • Low Risk Issues: 8 identified
Overall Security Posture: MODERATE RISK - Suitable for testnet deployment with immediate remediation of critical issues required before mainnet deployment with user funds.

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1. Current Architecture Analysis

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1.1 System Components

The vault system consists of four primary components:
Purpose: High-level interface for vault operations using WebAssembly enclavesSecurity Features:
  • Input validation framework with regex patterns
  • Secure error handling with sanitized messages
  • WASM plugin integrity verification via SHA256 hashing
  • Restricted host and filesystem access for WASM plugins
Purpose: WebAssembly-based secure execution environment for MPC operations Security Features: - Sandboxed execution environment - Rate limiting (60 operations/minute per vault) - Resource constraints (max 100 vaults per instance) - Ownership-based access control - Configurable IPFS endpoints and timeouts
Purpose: Blockchain state management and vault lifecycle operations Security Features: - Vault state persistence with enclave data separation
  • Integration with DID-based authentication - Service registration verification
Purpose: Multi-party computation cryptographic operationsSecurity Features:
  • AES-GCM encryption for data at rest
  • ECDSA signing with SHA3-256 hashing
  • Key derivation and rotation capabilities

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2. Security Fixes Analysis

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2.1 Recently Implemented Security Improvements

Based on code analysis and git history, the following security enhancements have been implemented:

WASM Sandbox Restrictions

✅ EFFECTIVE
  • Restricted allowed hosts to local IPFS endpoints only
  • Limited file system access to /tmp/vault-wasm directory
  • Well-implemented defense against WASM plugin abuse

Input Validation Framework

✅ EFFECTIVE - Vault ID validation with alphanumeric constraints - CID validation with Base58 format checking - Password validation with UTF-8 and size constraints - Comprehensive validation prevents injection attacks

Error Message Sanitization

✅ EFFECTIVE - SecureError type with public/internal error separation - Structured error codes prevent information leakage - Prevents sensitive information disclosure

Rate Limiting and Resource Constraints

✅ EFFECTIVE - 60 ops/minute per vault, max 100 vaults per instance - Protection against resource exhaustion attacks - Well-implemented DoS protection

Plugin Integrity Verification

⚠️ PARTIALLY EFFECTIVE - Optional SHA256 hash verification - Defaults to empty hash (backward compatibility) - Good foundation but needs enforcement in production

Access Control Implementation

⚠️ NEEDS IMPROVEMENT
  • Owner-based access with pseudo-authentication
  • Uses vault ID as owner ID (placeholder implementation)
  • Insufficient for production use

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3. Wallet Operation Security Assessment

Vault Generation and Key Derivation

  • Strength: Uses secure MPC protocol for key generation
  • Weakness: No entropy source verification
  • Risk Level: Medium
  • CVSS Score: 5.3 (AV:N/AC:L/PR:N/UI:N/S:U/C:L/I:N/A:N)
  • Strength: Proper ECDSA implementation with SHA3-256 - Weakness: Missing signature malleability protection - Risk Level: Medium - CVSS Score: 4.8 (AV:N/AC:L/PR:H/UI:R/S:C/C:L/I:L/A:N)
  • Strength: Standard ECDSA verification process - Weakness: No timestamp validation for replay protection - Risk Level: Medium - CVSS Score: 5.4 (AV:N/AC:L/PR:L/UI:R/S:C/C:L/I:L/A:N)
  • Strength: MPC refresh protocol for key rotation - Weakness: No automated rotation enforcement - Risk Level: Low - CVSS Score: 3.7 (AV:N/AC:H/PR:N/UI:N/S:U/C:N/I:N/A:L)
  • Strength: AES-GCM encryption for data at rest
  • Weakness: No integrity verification after retrieval
  • Risk Level: High
  • CVSS Score: 7.5 (AV:N/AC:L/PR:N/UI:N/S:U/C:H/I:N/A:N)

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4. Threat Analysis by Risk Level

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4.1 CRITICAL Vulnerabilities (Immediate Action Required)

These vulnerabilities require immediate remediation before any production deployment.
  • Location: cmd/vault/main.go:647-676
  • Issue: Pseudo-authentication using vault ID as owner ID
  • Impact: Complete vault takeover by any user knowing vault ID
  • CVSS Score: 9.8 (AV:N/AC:L/PR:N/UI:N/S:U/C:H/I:H/A:H)
  • Remediation: Implement proper JWT/OAuth2 authentication with cryptographic proofs
  • Location: internal/vault/vault.go:138 - Issue: WASM hash verification disabled by default (empty ExpectedSHA256) - Impact: Malicious WASM plugin execution - CVSS Score: 9.1 (AV:N/AC:L/PR:N/UI:N/S:C/C:H/I:H/A:N) - Remediation: Enforce mandatory WASM integrity checks in production
  • Location: x/dwn/keeper/keeper.go:404
  • Issue: Default password generation based on predictable values
  • Impact: Vault encryption key compromise
  • CVSS Score: 8.8 (AV:N/AC:L/PR:L/UI:N/S:U/C:H/I:H/A:H)
  • Remediation: Implement secure password derivation or user-provided passwords

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4.2 HIGH Risk Vulnerabilities

  • Location: crypto/mpc/enclave.go:51-68
  • Issue: No HMAC or authenticated encryption verification after IPFS retrieval
  • Impact: Data tampering attacks on stored vault data
  • CVSS Score: 7.5 (AV:N/AC:L/PR:N/UI:N/S:U/C:H/I:N/A:N)
  • Location: crypto/mpc/enclave.go:111-121 - Issue: ECDSA signatures vulnerable to malleability attacks - Impact: Transaction replay with modified signatures - CVSS Score: 7.4 (AV:N/AC:H/PR:N/UI:N/S:U/C:H/I:H/A:N)
  • Location: cmd/vault/main.go:321-392 - Issue: Direct CID usage without additional validation - Impact: IPFS injection attacks or resource exhaustion - CVSS Score: 7.1 (AV:N/AC:L/PR:L/UI:N/S:U/C:N/I:N/A:H)
  • Location: cmd/vault/main.go:505-568
  • Issue: Inadequate synchronization for concurrent vault operations
  • Impact: Data corruption or inconsistent vault state
  • CVSS Score: 6.8 (AV:N/AC:H/PR:H/UI:N/S:U/C:H/I:H/A:H)

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4.3 MEDIUM Risk Vulnerabilities

  • Location: crypto/mpc/enclave.go:78
  • CVSS Score: 5.9 (AV:N/AC:H/PR:N/UI:N/S:U/C:H/I:N/A:N)
  • Location: Various signing functions - CVSS Score: 5.4 (AV:N/AC:L/PR:L/UI:R/S:C/C:L/I:L/A:N)
  • Location: Throughout codebase - CVSS Score: 4.3 (AV:N/AC:L/PR:L/UI:N/S:U/C:N/I:N/A:L)
  • Location: cmd/vault/main.go:986-988 - CVSS Score: 4.2 (AV:N/AC:L/PR:H/UI:N/S:U/C:L/I:L/A:N)
  • Location: cmd/vault/main.go:947-954 - CVSS Score: 5.8 (AV:N/AC:L/PR:N/UI:R/S:C/C:L/I:L/A:N)
  • Location: cmd/vault/main.go:976-983
  • CVSS Score: 4.9 (AV:L/AC:H/PR:N/UI:N/S:U/C:L/I:L/A:L)

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4.4 LOW Risk Issues

  • LOW-001: Predictable Enclave ID Generation - LOW-002: Missing Rate Limit Bypass Protection - LOW-003: Insufficient Logging for Security Events - LOW-004: No Vault Backup/Recovery Mechanism - LOW-005: Missing Health Check Attestation Validation - LOW-006: Hardcoded Configuration Values - LOW-007: No Circuit Breaker for IPFS Operations - LOW-008: Missing Input Length Validation Edge Cases

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5. Production Readiness Assessment

Testnet Deployment

⚠️ CONDITIONAL APPROVALSuitable with immediate critical fixes:
  • Fix CRITICAL-001 (Authentication)
  • Fix CRITICAL-002 (WASM Integrity)
  • Fix CRITICAL-003 (Default Passwords)
Timeline: 2-3 weeks with dedicated security effort

Mainnet with User Funds

❌ NOT RECOMMENDED Requires comprehensive security hardening: - All CRITICAL and HIGH issues resolved - External security audit by certified firm
  • Bug bounty program - Comprehensive monitoring and alerting Timeline: 3-4 months minimum

Enterprise/Institutional Use

❌ NOT RECOMMENDEDRequires enterprise-grade security controls:
  • SOC 2 Type II compliance
  • Multi-signature authorization workflows
  • Hardware Security Module (HSM) integration
  • Advanced threat detection and response
Timeline: 6-8 months minimum

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6. Remediation Recommendations

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6.1 Immediate Actions (0-2 weeks)

1

Implement Proper Authentication System

  • Replace pseudo-authentication with JWT/OAuth2
  • Add cryptographic proof of vault ownership
  • Implement session management with timeout
2

Enforce WASM Integrity Verification

  • Remove backward compatibility for empty hashes - Implement automatic hash verification - Add WASM signature verification
3

Replace Hardcoded Password Generation

  • Implement secure key derivation functions (PBKDF2/Argon2)
  • Add user-provided password support
  • Implement password strength requirements

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6.2 Short-term Actions (2-8 weeks)

1

Add Data Integrity Verification

  • Implement HMAC for IPFS stored data
  • Add checksum verification after retrieval
  • Implement authenticated encryption (AES-GCM with additional data)
2

Implement Signature Malleability Protection

  • Use deterministic ECDSA (RFC 6979) - Add signature canonicalization - Implement proper nonce generation
3

Enhance WebAuthn Integration

  • Complete WebAuthn assertion verification
  • Add biometric authentication support
  • Implement proper challenge-response flow

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7. Implementation Timeline

Phase 1: Critical Security Fixes (2-3 weeks)

  • Authentication system implementation
  • WASM integrity enforcement
  • Password security enhancement
  • Basic monitoring setup
  • Data integrity verification - Signature security improvements - Input validation enhancements - Concurrent access protection
  • Comprehensive monitoring implementation - Advanced security controls - Performance optimization - External security audit preparation
  • Compliance framework implementation
  • Advanced threat protection
  • HSM integration
  • Comprehensive testing and validation

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8. Compliance and Standards Assessment

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8.1 Current Compliance Status

OWASP Top 10

❌ Multiple violations identified

NIST Cybersecurity Framework

❌ Partial implementation

ISO 27001

❌ Insufficient security controls

SOC 2

❌ Not compliant
  1. Implement OWASP secure coding practices
  2. Adopt NIST cybersecurity framework controls
  3. Prepare for SOC 2 Type II audit
  4. Consider ISO 27001 certification for enterprise use

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9. Conclusion

The Sonr MPC vault system demonstrates good architectural principles and has implemented several important security improvements. However, critical vulnerabilities prevent immediate production deployment with user funds.
The system is suitable for testnet deployment with immediate remediation of the three critical issues identified. A comprehensive security hardening effort over 3-4 months is required before mainnet deployment with user funds is recommended.
Immediate Priority: Address the three critical vulnerabilities before any production deployment.
Recommendation: Engage a certified security firm for external audit before mainnet launch.
Report Prepared By: Claude (Senior Security Auditor)
Date: August 5, 2025
Classification: Confidential - Internal Use Only