Galaxy Research Confirms $115 Million Stolen From Coldcard Wallets After Firmware Randomness Failure

Losses from the attack on Coinkite's Coldcard hardware wallets now stand at $115 million in bitcoin, according to Galaxy Digital's latest figures. Galaxy Research has traced 1,719 BTC stolen across three waves and by at least 15 separate attackers, and has said the eventual total could exceed $130 million.

The root cause is not a smart contract and not a phishing campaign. During a 2021 migration to Bitcoin Core's libsecp256k1 library, Coldcard's seed generation began drawing from MicroPython's software pseudorandom number generator rather than the device's dedicated hardware random number generator. Coinkite's own technical account describes a fallback generator seeded from the chip's unique identifier and timer registers. The two functions shared a signature, so the build completed without error. Seeds created on firmware 4.0.1 and later left an effective search space of roughly 40 bits on Mk3 devices, and about 72 bits on the Mk4, Q and Mk5, which mixed in entropy from their secure elements. The design target was 128 bits.

An attacker drained about 594 BTC from roughly 500 wallets in 25 minutes on July 31. Coinkite has since shipped emergency firmware for all affected models and says it destroyed remaining vulnerable inventory. Galaxy reports that roughly 90 percent of the stolen coins have not moved and remain traceable on-chain.

Zach Herbert, chief executive of the competing hardware wallet maker Foundation, argued in CoinDesk that a community organized around verification instead deferred for five years to one vendor's reputation. Coinkite has also said artificial intelligence probably helped the attacker locate the defect, and that its own review of the same code, also assisted by artificial intelligence, missed it.