Your Code Is Audited, Your Keys Aren’t: Why Drains Keep Happening to Web3 Builders and Users

Private keys represent the ultimate authority in decentralized systems. They control assets, sign transactions, authenticate identities, and anchor an individual’s entire on-chain reputation. Once a private key is compromised, the attacker gains irreversible and total control. There are no chargebacks, no recovery workflows, and no intermediaries who can intervene.

Because of this finality, understanding how private keys leak in real-world environments is essential. The threat landscape is far broader than most developers expect, and many compromises occur through indirect or non-obvious vectors. This guide provides a structured, technically grounded breakdown of the most critical leakage points and how they lead to catastrophic compromise.

There are certain leakage vectors associated :

1. GitHub and Version Control Leaks

Pushing private keys, .env files, or secrets to GitHub is the default path to compromise. Even if you delete the file later, the entire commit history remains accessible. Attackers continuously run automated scrapers against GitHub’s public firehose, pattern-matching for private keys, mnemonics, JSON keystores, and configuration files. Once detected, the key is harvested and imported into wallet software. Draining occurs within seconds, often before a developer even realizes the mistake. Example of .env or any sensitive files getting committed to github or version control systems.

# .env file committed to repo
PRIVATE_KEY=0x1234567890abcdef...
DATABASE_URL=...
API_KEY=...

Mitigation :

• Add the sensitive file folders in .gitignore to prevent leak and from accessing sensitive files locally

# .gitignore - prevent leaks entirely
.env
.env.local
.env.*.local
secrets/
*.key
*.pem

• Use git-secrets or pre-commit hooks to scan for hardcoded secrets before commits
• Store secrets in your cloud provider's secrets manager (AWS Secrets Manager, Azure Key Vault, Google Secret Manager)
• Use environment variables injected at runtime, not hardcoded values

2. Pastebin and Temporary Sharing Services

Developers frequently share logs, snippets, and debugging output via platforms such as Pastebin, Discord, Slack, and Ghostbin. Although convenient, these platforms are public by design, often indexed by search engines, and aggressively scraped by attackers.

For example, if something like this is posted to pastebin :

Help! Getting error with this code:
const wallet = new ethers.Wallet(
  "0xabc123def456...", // Private key
  provider
);
// Posted to public Pastebin / Discord channel

You can dork it via : site:pastebin.com intext:”new ethers.Wallet”

Attackers often do continuous scanning for the following keywords :

"new ethers.Wallet("
"mnemonic"
"PRIVATE_KEY="

Mitigation:

Never input private keys in such services.

3. Social engineering

While developers often focus on technical exploits, human-layer vulnerabilities are among the most common points of failure. Attackers routinely impersonate project maintainers, support agents, or collaborators to trick individuals into handing over sensitive information.

So always remember this :

• Sharing mnemonic phrases over screen-share calls
• Pasting private keys into "support" chats
• Entering private keys on phishing sites posing as official platforms
• "Helping" someone create a wallet by handling it for them

Mitigation :

• Disable screen recording and sharing when handling wallets
• Never share mnemonic phrases or private keys with anyone—not even official support
• Verify URLs manually (not through links)
• Create wallets independently; never let anyone else "set it up" for you
• If compromise is suspected, immediately transfer assets to a new wallet

4. Compromised server/system :

This is where security gets complex. Even with perfect code, a compromised server or system can leak everything. Common attack vectors include:

4.1. Remote code execution (RCE)

It is when attackers get access to system/server and execute code remotely including system commands to exploit and remotely control it. The main exploit points for this are :

• Affected/vulnerable component : Checkout recent CVEs for the components being in the system/application. If they are using vulnerable component than, its easy to exploit them. The recent example of this is react2shell (CVE**-2025-55182**)

4.2. Supply chain attack

• Compromised npm/pip/cargo packages
• Typosquatted packages (etherjs vs ethersjs)
• Malicious update by a compromised maintainer
• Build pipelines exfiltrating environment variables

For this you can checkout more on our prior post where we have discussed everything in detail about supply chain attack vectors - https://blog.valkyri.xyz/posts/wallet-extension-pentesting/#1-supply-chain-attack

Also you could check if dependencies contains malware via our tool : https://npms.fullstackaudits.com/

4.3. Command Injection

It is an attack in which the goal is execution of arbitrary commands on the host operating system via a vulnerable application. Command injection attacks are possible when an application passes unsafe user supplied data (forms, cookies, HTTP headers etc.) to a system shell. In this attack, the attacker-supplied operating system commands are usually executed with the privileges of the vulnerable application. Command injection attacks are possible largely due to insufficient input validation.

Read more about this issue via OWASP guide

4.4. Cloud Security

Misconfigured cloud instances could lead to leaking private key through logs, misconfigured permissions for IAM. For example a leaked cloud credential can allow attackers to call: secretsmanager.getSecretValue(...) and obtain wallet signing keys with a single API request

5. Deployment Scripts

Developers often embed private keys into deployment scripts for local testing. If these scripts are checked into version control, shared with teammates, or run in CI pipelines, the private key becomes exposed.

Furthermore, private keys passed via command-line arguments often appear in shell history files (~/.bash_history), making them accessible to anyone with terminal access.

Because deployment wallets typically hold elevated privileges, leakage at this layer is especially destructive.

6. Logging and debugging

Most real-world private key leaks in dapps start with “temporary” debug logs that become permanent once they hit disk, APM, or centralized log aggregators.

Common patterns:

// Hardhat / backend service
const wallet = new ethers.Wallet(process.env.PRIVATE_KEY, provider);
console.log("[init] Using wallet:", wallet);          // logs address + internals
console.log("[debug] pk:", process.env.PRIVATE_KEY);  // catastrophic

Issues :

• console.log ends up in:
  • Local log files (pm2, docker logs, journald).
  • Centralized logging (CloudWatch, Datadog, ELK).
  • Third‑party error trackers (Sentry, Rollbar).
• Logs are often:
  • Retained for months.
  • Accessible to multiple teams and vendors.
  • Unencrypted and searchable.

Mitigation :

• Enforce log redaction patterns at code-review level
• Block builds if PRIVATE_KEY or MNEMONIC appears in logs (static scan).
• Restrict log access via access control mechanisms. And sensitive logs should be encrypted at rest.