There is no check for name field in metadata.gz. By assigning a maliciously crafted string like ../../../../../any/where to the field, an attacker can create an arbitrary file out of the directory of the gem, or even replace an existing file with a malicious file.
Proof of Concept 1: Create a file anywhere
This PoC attempts to create a file /tmp/malicious-0/BOOOOM.
1) Download the attached file malicious.gem.
2) Run gem install malicious.gem --no-doc.
3) /tmp/malicious-0/BOOOOM should be created.
malicious.gem assigns ../../../../../../../../../../tmp/malicious as name field. This attack is relatively weak since the path must include a directory named <name>-<version>, such as malicious-0. Still, there are many chances that cause a catastrophe. For example, think of replacing a file in /etc/dbus-1/.
Proof of Concept 2: Replace rackup command
This PoC attempts to replace gems/rack-2.0.3/bin/rackup with a malicious file.
1) Download the attached file replace-rackup.gem.
2) Run gem install rack -v 2.0.3.
3) Run gem install replace-rackup.gem --no-doc.
4) Run rackup. It will emit just BOOOOM!.
replace-rackup.gem assigns ../gems/rack as name field, and contains a malicious file bin/rackup. This is really exploitable for attackers.
Note
For how to create the malicious gems, see the attached file src.tar.gz.
Proof of Concept:
https://gitlab.com/exploit-database/exploitdb-bin-sploits/-/raw/main/bin-sploits/42611.zip