Key facts
- A firmware bug in Coldcard hardware wallets rerouted seed generation to a software fallback.
- The exploit reduced security from 128 bits to approximately 40 bits.
- Hackers potentially stole over $130 million in Bitcoin.
- At least 15 attackers exploited the Coldcard vulnerability.
- Estimated losses reached $100 million across three confirmed attack waves.
- A dormant Bitcoin wallet moved 500 BTC, valued at $31.3 million.
- The dormant wallet had been inactive since 2013.
- Affected users are urged to move funds and update devices.
- The exploit primarily affected older models of Coldcard wallets.
A critical firmware bug in Coldcard Bitcoin hardware wallets has enabled hackers to exploit a vulnerability, potentially stealing over $130 million in Bitcoin. The exploit stems from a flaw that rerouted seed generation to a software fallback, significantly reducing the security of affected devices. This reduced the effective security from 128 bits to approximately 40 bits, making seed phrases more predictable and susceptible to guessing by attackers.
Galaxy Digital has reported that at least 15 attackers exploited this vulnerability, with estimated losses reaching $100 million across three confirmed attack waves. One source suggests that AI hardening could have prevented the exploit. Amidst this security crisis, a Bitcoin wallet that had been inactive since 2013 transferred 500 BTC, valued at approximately $31.3 million. This movement occurred as the estimated total value lost due to Coldcard vulnerabilities reached $130 million. Affected users are being urged to move their funds to new, secure wallets and update their Coldcard devices to mitigate further risks.
The exploit primarily affected older models of Coldcard wallets. The vulnerability allowed attackers to guess predictable seed phrases, a critical component for accessing Bitcoin holdings. The scale of the potential loss highlights the importance of robust security measures in hardware cryptocurrency storage solutions. Users are advised to exercise extreme caution and follow security protocols recommended by Coldcard and security experts.