Key facts
- Ledger cited the Coldcard exploit as a warning for hardware Bitcoin wallet security.
- The Coldcard flaw stemmed from using software fallback instead of a hardware random number generator for recovery seeds.
- Ledger's own devices were not affected due to using certified hardware random number generators.
- AI is accelerating vulnerability discovery, necessitating faster defense mechanisms.
- Users should verify how hardware wallets generate randomness and if it's independently certified.
Hardware wallet manufacturer Ledger has issued a warning to the cryptocurrency industry following a recent exploit affecting Coldcard devices. According to Ledger CTO Charles Guillemet, the incident underscores the critical importance of robust randomness generation for hardware wallets and highlights how artificial intelligence is reshaping cybersecurity threats and defenses.
Guillemet stated that the Coldcard exploit exposed weaknesses in how some devices create cryptographic randomness, emphasizing that the entire security model of a hardware wallet depends on this process. He noted that while open-source code is valuable, it does not equate to thorough review, suggesting that an adversary used AI to discover the flaw in Coldcard's public code, which had reportedly been present for over five years.
The Coldcard maker, Coinkite, disclosed the flaw last week, which involved a software fallback instead of the device's hardware random number generator for creating wallet recovery seeds. This vulnerability made some private keys guessable, leading to thefts estimated at around $130 million. Coinkite has since released patched firmware and urged affected users to secure their funds.
Ledger asserted that its own hardware wallets were not impacted because they utilize a true hardware random number generator integrated into a certified Secure Element, with no software fallback. Guillemet stressed that AI is enabling attackers to find vulnerabilities at machine speed, necessitating that defenses also operate at the same pace, driven by security by design, hardware, and mathematical principles.
He further advised users evaluating hardware wallets to understand their randomness generation process and ensure it has been independently certified, stating that randomness should originate from physics, not just a formula, and be validated by security experts.