fix(security): don't silently leave a wallet unencrypted or unlocked (W2-2, W2-4)

P0-B encryption-integrity cluster.

W2-2: the first-run wizard's "encrypt" stored the passphrase only in memory and let the
user into the app immediately, so a quit/crash or a failed daemon connect before the
deferred encryption applied left the wallet unencrypted with NO record encryption was
ever requested — the user believing it was encrypted. A persisted encryption_pending
settings flag is now set the moment encryption is requested (never the passphrase, only
the fact). refreshWalletEncryptionState() reconciles it on every connect: wallet observed
encrypted -> clear the flag; wallet NOT encrypted while the flag is set and no deferred
encryption is pending/in-flight -> a once-per-session "your wallet is NOT encrypted — open
Settings to finish" warning (the flag stays set, so it recurs each launch until resolved).
The passphrase is deliberately never persisted to auto-complete — surfacing it is the
secure choice.

W2-4: lockWallet()'s continuation only handled success — a failed walletlock RPC silently
left the wallet UNLOCKED (an unfulfilled auto-lock). It now logs and warns once (reset on
the next successful lock) so a failing auto-lock is visible instead of leaving the wallet
exposed.

Touches settings.{h,cpp}, app_wizard.cpp, app_security.cpp, app.h. Not unit-testable at
this layer (RPC/connect-driven state). Build-clean; ctest 1/1. See docs/wallet-hardening.md.

Co-Authored-By: Claude Opus 4.8 <noreply@anthropic.com>

docs/wallet-hardening.md

@@ -17,7 +17,7 @@ Status legend: ☐ not started · ◐ in progress · ☑ landed & verified
 | Phase | Findings | Theme | Status |
 |-------|----------|-------|--------|
 | **P0-A** | W7-1, W2-1, W4-1, W4-3, W2-3, W4-5, W5-3 ✓ | Secret hardening (console redaction + delete-export + memzero + lite encrypt-at-create) | ☑ 7/7 |
-| **P0-B** | W2-2/W4-2, W2-4 | Encryption integrity (never silently unencrypted) | ☐ |
+| **P0-B** | W2-2/W4-2, W2-4 | Encryption integrity (never silently unencrypted) | ☑ |
 | **P1-A** | W3-1, W3-2, W3-4, W3-3 | Migrate-to-seed correctness (fund-adjacent) | ☐ |
 | **P1-B** | W1-1, W1-3, W1-2, W1-4 | Missing/wrong wallet-file safety | ☐ |
 | **P2**  | W6-2, W5-1, W5-2, W6-1, W6-3 | Stale state & lite save-failure surfacing | ☐ |
@@ -112,6 +112,11 @@ Land W7-2 first — it unblocks the rest.
 
 ## Progress log
 
+- **P0-B / W2-2 (deferred encryption silently lost) + W2-4 (auto-lock silent-fail)** — ☑ landed:
+  - **W2-2:** the wizard's deferred encryption was stored only in memory, so a quit/crash or a failed daemon connect before it applied left the wallet unencrypted with **no record it was ever requested** — the user believing it was encrypted. Now a persisted `encryption_pending` settings flag is set the moment encryption is requested (**never the passphrase** — only the fact). `refreshWalletEncryptionState()` reconciles it on every connect: wallet observed **encrypted** → clear the flag; wallet **not** encrypted while the flag is set and no deferred encryption is pending/in-flight → a once-per-session **"your wallet is NOT encrypted — open Settings to finish"** warning (the flag stays set, so it recurs each launch until resolved). We deliberately don't persist the passphrase to auto-complete — surfacing it is the secure choice.
+  - **W2-4:** `lockWallet()`'s continuation only handled success — a failed `walletlock` silently left the wallet **unlocked** (an unfulfilled auto-lock). It now logs and warns once (reset on the next successful lock), so a failing auto-lock is visible instead of leaving the wallet exposed.
+  Touches `settings.{h,cpp}`, `app_wizard.cpp`, `app_security.cpp`, `app.h`. Not unit-testable at this layer (RPC/connect-driven state machine); build-clean, `ctest` 1/1.
+
 - **P0-A / W5-3 (lite create-time passphrase)** — ☑ landed (chose option **(b) wire it up**). The lite create/open/restore passphrase was collected but never consumed by the backend — a "passphrase" field that did nothing. It now has a real meaning for all three operations, in `LiteWalletController`: **create/restore** → `encryptWallet(passphrase)` (the backend encrypts + locks + saves the brand-new wallet); **open** → `unlockWallet(passphrase)`, but only when `encryptionStatus()` reports the existing wallet is actually encrypted+locked (skips a spurious unlock otherwise). Encrypt/unlock take their own copy and wipe it; a post-create encrypt failure is `liteLog`'d (the wallet still exists — the create isn't failed). Six existing lite-controller tests carried an incidental `hunter2` create passphrase from the dead-field era; removed (they test non-encryption flows and want an unencrypted wallet), and added `testLiteWalletControllerCreateEncryptsWithPassphrase` to prove the new behavior. Build-clean; `ctest` 1/1. *(Follow-up UX polish: `settings_page` could show the passphrase field's meaning per operation — "encrypt" for create/restore vs "unlock" for open.)*
 - **P0-A / W4-5 (seed-backup file)** — ☑ landed (proportionate): the seed "Save" already wrote 0600 + zeroed the in-memory buffer, but the success message was a bare "Saved to <path>". It now reads "**Saved an UNENCRYPTED seed file — move it to secure offline storage and delete this copy**: <path>", so the plaintext-on-disk risk is called out. `i18n.cpp` (English source; `res/lang` back-fill of this changed key is deferred to the batch i18n pass). A stronger fix (pre-save confirmation, or dropping the file-save in favor of on-screen + Copy) is a follow-up UX decision.
 - **P0-A / W4-1 · W4-3 · W2-3 (memzero cluster)** — ☑ landed, using the file's established `sodium_memzero` pattern (matching the existing lambda-capture scrub at app_network.cpp:2885 and JSON scrub at :4025) rather than a new type, since this is fund-moving code:

src/app.h

@@ -1024,6 +1024,8 @@ private:
     double clipboard_clear_deadline_ = 0.0;
     float loading_timer_ = 0.0f;  // spinner animation for loading overlay
     double connect_stall_since_ = 0.0;  // ImGui::GetTime() when the daemon first went "reachable but not ready"; 0 = not stalling (see util/connect_stall.h)
+    bool encryption_incomplete_warned_ = false;  // W2-2: once-per-session guard for the "encryption didn't complete" warning
+    bool lock_failure_warned_ = false;           // W2-4: guard so a repeatedly-failing auto-lock warns once, not every retry
 
     // Current page (sidebar navigation)
     ui::NavPage current_page_ = ui::NavPage::Overview;

src/app_security.cpp

@@ -487,7 +487,17 @@ void App::lockWallet() {
                 state_.locked = true;
                 state_.unlocked_until = 0;
                 resetTransactionHistoryCacheSession();
+                lock_failure_warned_ = false;
                 DEBUG_LOGF("[App] Wallet locked\n");
+            } else {
+                // The walletlock RPC failed — the wallet is still UNLOCKED. Surface it (once) rather
+                // than silently leaving an auto-lock unfulfilled and the wallet exposed (W2-4).
+                DEBUG_LOGF("[App] walletlock failed — wallet remains unlocked\n");
+                if (!lock_failure_warned_) {
+                    lock_failure_warned_ = true;
+                    ui::Notifications::instance().warning(
+                        "Couldn't lock the wallet — it is still unlocked. Check the daemon connection.", 12.0f);
+                }
             }
         };
     });
@@ -564,6 +574,12 @@ void App::refreshWalletEncryptionState() {
                     state_.unlocked_until = until;
                     state_.locked = (until == 0);
                     state_.encryption_state_known = true;
+                    // Wallet is encrypted — any pending deferred-encryption request has now been
+                    // satisfied (however it completed). Clear the persisted flag (W2-2).
+                    if (settings_ && settings_->getEncryptionPending()) {
+                        settings_->setEncryptionPending(false);
+                        settings_->save();
+                    }
                     if (state_.locked) {
                         resetTransactionHistoryCacheSession();
                     } else if (state_.transactions.empty()) {
@@ -576,6 +592,19 @@ void App::refreshWalletEncryptionState() {
                     state_.locked = false;
                     state_.unlocked_until = 0;
                     state_.encryption_state_known = true;
+                    // W2-2: encryption was requested (persisted flag) but the wallet is NOT encrypted,
+                    // and no deferred encryption is pending/in-flight — it was lost to a quit/crash or a
+                    // failed connect before it applied. Warn (once/session) instead of silently leaving
+                    // an unencrypted wallet the user believes is protected. The flag stays set until the
+                    // wallet is actually encrypted, so the warning recurs each launch until resolved.
+                    if (settings_ && settings_->getEncryptionPending() &&
+                        !wallet_security_.hasDeferredEncryption() && !encrypt_in_progress_ &&
+                        !encryption_incomplete_warned_) {
+                        encryption_incomplete_warned_ = true;
+                        ui::Notifications::instance().warning(
+                            "Wallet encryption did not complete — your wallet is NOT encrypted. "
+                            "Open Settings to finish encrypting it.", 30.0f);
+                    }
                     if (state_.transactions.empty()) {
                         loadTransactionHistoryCacheIfAvailable();
                     } else {

src/app_wizard.cpp

@@ -1338,6 +1338,10 @@ void App::renderFirstRunWizard() {
                     wallet_security_.beginDeferredEncryption(
                         std::string(encrypt_pass_buf_),
                         (pinEntered && pinOk) ? pinStr : std::string());
+                    // Persist that encryption was requested (never the passphrase) so a quit/crash or
+                    // failed daemon connect before it applies isn't silent — reconciled on the next
+                    // connect in refreshWalletEncryptionState (W2-2). Saved with the wizard state below.
+                    settings_->setEncryptionPending(true);
 
                     // Clear sensitive buffers
                     memset(encrypt_pass_buf_, 0, sizeof(encrypt_pass_buf_));

src/config/settings.cpp

@@ -231,6 +231,7 @@ bool Settings::load(const std::string& path)
         }
         loadScalar(j, "wizard_completed", wizard_completed_);
         loadScalar(j, "seed_backup_reminded", seed_backup_reminded_);
+        loadScalar(j, "encryption_pending", encryption_pending_);
         loadScalar(j, "daemon_update_prompted_size", daemon_update_prompted_size_);
         loadScalar(j, "active_wallet_file", active_wallet_file_);
         loadScalar(j, "seed_migration_pending", seed_migration_pending_);
@@ -497,6 +498,7 @@ bool Settings::save(const std::string& path)
     }
     j["wizard_completed"] = wizard_completed_;
     j["seed_backup_reminded"] = seed_backup_reminded_;
+    j["encryption_pending"] = encryption_pending_;
     j["daemon_update_prompted_size"] = daemon_update_prompted_size_;
     j["active_wallet_file"] = active_wallet_file_;
     j["seed_migration_pending"] = seed_migration_pending_;

src/config/settings.h

@@ -327,6 +327,12 @@ public:
     bool getSeedBackupReminded() const { return seed_backup_reminded_; }
     void setSeedBackupReminded(bool v) { seed_backup_reminded_ = v; }
 
+    // Persisted the moment deferred (wizard) encryption is requested; cleared only once the wallet is
+    // observed to be actually encrypted. Lets a quit/crash/failed-connect before it applies be detected
+    // and surfaced (W2-2). NEVER stores the passphrase — only the fact that encryption was requested.
+    bool getEncryptionPending() const { return encryption_pending_; }
+    void setEncryptionPending(bool v) { encryption_pending_ = v; }
+
     // Bundled-daemon size we last prompted to install (see App::renderDaemonUpdatePrompt). Lets the
     // "a newer node is bundled — update?" prompt fire once per wallet version, never re-nagging.
     long long getDaemonUpdatePromptedSize() const { return daemon_update_prompted_size_; }
@@ -574,6 +580,7 @@ private:
     std::map<std::string, AddressMeta> address_meta_;
     bool wizard_completed_ = false;
     bool seed_backup_reminded_ = false;
+    bool encryption_pending_ = false;
     long long daemon_update_prompted_size_ = 0;  // bundled daemon size last offered via the update prompt
     std::string active_wallet_file_ = "wallet.dat";  // -wallet=<name> the daemon loads (multi-wallet)
     bool seed_migration_pending_ = false;