Coldcard Hardware Wallet Flaw Drains 594 BTC in Rapid Sweep

Key Takeaways

• Coldcard hardware wallet flaw let attackers rebuild seeds from everyday chip data and empty offline balances in minutes.  
• Weak randomness turned trusted air-gapped devices into open targets overnight.  
• Rival Ledger quickly promoted its own hardware as the preferred safer choice.

A Coldcard hardware wallet flaw allowed an attacker to drain roughly 594 Bitcoin worth $38 million from nearly 500 single-signature wallets early Friday. The theft completed in under 30 minutes as funds moved across three blocks. Weak Bitcoin seed entropy in older Mk3 firmware allowed the attacker to rebuild private keys from non-secret chip data. Coinkite has warned affected users while newer models appear safer. Bitcoin prices held near $64,000 with little reaction.  

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Coldcard Hardware Wallet Flaw Leaves Hundreds of Users Exposed Overnight  

The Coldcard hardware wallet flaw struck holders of older devices and emptied scores of long-idle addresses before most people woke up. Attackers reconstructed private keys after weak Bitcoin seed entropy replaced true hardware randomness with predictable chip data.

Hundreds of single-signature wallets lost their balances in a coordinated sweep that finished inside half an hour. Coinkite issued a rapid Coinkite firmware warning that told Mk3 owners to generate new seeds and transfer remaining coins without delay. Newer models escaped the same exposure according to early checks. 

This Offline Bitcoin theft adds to a recent pattern of costly breaches, including a major Solana protocol exploit that drained hundreds of millions from users earlier in the year.  Elevated Hardware key risk now pushes many toward multisignature setups or extra passphrase layers. Bitcoin traded near recent levels as the market absorbed the news with almost no visible reaction.

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Bitcoin Seed Entropy Bug Turns Air-Gapped Devices Vulnerable

A failure in Bitcoin seed entropy removed the core shield that kept private keys offline and unreachable. The Coldcard hardware wallet flaw allowed reconstruction of seeds because the device substituted measurable chip values for genuine random input. Air-gapped units that never connected to the internet still produced guessable phrases under the affected firmware.

Coinkite released a Coinkite firmware warning that directed owners of the impacted models to discard existing seeds and create replacements on updated hardware. This opened the door to Offline Bitcoin theft even for users who followed every recommended isolation practice. Parallel risks surface across the sector after an oracle-driven exploit drained an Arbitrum RWA platform.

Ledger and Trezor, Coldcard’s main competitors, posted on social media regarding their services and how their hardware wallets don’t have the same flaw. Growing Hardware key risk now drives demand for independent verification steps during seed creation. Price action stayed limited as the market digested the latest proof that isolation alone cannot close every technical gap.

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