Polymarket Copy Trading Bots Caught Distributing Malicious Code Targeting Private Keys

Security researchers at SlowMist Technology have issued a critical alert regarding a dangerous threat lurking in Polymarket-related trading applications. According to reports from late December 2024, a developer created a copy trading bot program that harbors hidden malicious code designed to compromise user wallet security. This incident highlights a growing trend of supply chain attacks within the cryptocurrency ecosystem.

How the Attack Works: GitHub-Based Code Injection

The attack begins where developers typically operate—on GitHub, where code repositories are shared openly. The malicious code was deliberately embedded into a Polymarket copy trading bot’s source code, disguised among legitimate functions. What makes this particularly insidious is the attacker’s methodology: the malicious components were spread across multiple code commits, making detection significantly more difficult for security auditors and casual code reviewers.

Upon execution, the compromised program performs a seemingly innocent action—it reads the user’s “.env” file, a configuration file commonly used in development environments to store sensitive credentials, including private wallet keys. However, rather than simply accessing local data, the program immediately transmits these credentials to external servers controlled by the attacker, effectively stealing the private keys that grant complete access to the user’s crypto assets.

Private Key Theft Through Configuration File Exploitation

This attack vector exploits a fundamental trust assumption in the developer community: that code repositories are safe and that downloaded open-source projects won’t contain deliberately hidden threats. The attacker’s strategy of continuously modifying and re-committing the code to GitHub served a dual purpose—not only did it make the malicious payload harder to spot in a single code review, but it also created multiple “versions” of the threat that could evade static analysis tools.

The .env file exploitation is particularly dangerous because many developers store their most sensitive credentials there, treating it as a local-only security measure that doesn’t require encryption. Users downloading the bot program had no indication that running it would expose their private keys to remote attackers.

SlowMist Security Alert: A Warning About Recurring Threats

23pds, Chief Information Security Officer of SlowMist Technology, amplified this security warning to the broader community, emphasizing that this incident follows a troubling pattern. His statement, “This is not the first time, and it won’t be the last,” underscores that supply chain attacks and malicious code injection have become systematic threats rather than isolated incidents.

SlowMist’s intervention is significant because the firm has established itself as a trusted voice in cryptocurrency security, regularly identifying vulnerabilities and threats that might otherwise go undetected. The organization’s willingness to publicize this threat demonstrates the severity they assess this malicious code campaign to represent.

How to Protect Your Wallet From Malicious Bots and Code

The implications are clear: downloading and executing trading bots, automation scripts, or any third-party tools requires scrutinous evaluation. Users should adopt several defensive practices:

• Review the source code thoroughly before execution, or consult with experienced developers who can audit the code for hidden threats
• Never store private keys or seed phrases in .env files or any unencrypted local files
• Use hardware wallets or air-gapped systems for long-term asset storage, minimizing exposure from compromised software
• Monitor your wallet activity regularly for unauthorized transactions that could indicate a prior key compromise
• Be skeptical of copy trading solutions that require private key or seed phrase access—legitimate tools typically use API keys with limited permissions instead

The security community’s ability to identify and warn against malicious code continues to be a critical defense mechanism, but ultimately, individual vigilance and cautious software evaluation practices remain the most effective safeguards against these evolving threats.