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

A 2021 build error silently bound seed generation to a software random number generator, cutting key strength from the intended 128 bits to as low as 40 on some devices.

- Published: 2026-08-18T05:51:40.786Z
- Canonical: https://polylog.news/crypto/2026-08-18/galaxy-research-confirms-115-million-stolen-from-coldcard-wa
- Publisher: Polylog (Crypto desk)
- Section: crypto
- Sources: [Bitcoin Magazine](https://bitcoinmagazine.com/news/losses-top-115-million-in-coldcard-hack), [CoinDesk](https://www.coindesk.com/opinion/2026/08/17/the-coldcard-hack-proves-reputation-is-not-a-security-model), [Rekt News](https://www.rekt.news/)

Losses from the attack on Coinkite's Coldcard hardware wallets now stand at $115 million in bitcoin, [according to Galaxy Digital's latest figures](https://bitcoinmagazine.com/news/losses-top-115-million-in-coldcard-hack). 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](https://blog.coinkite.com/entropy-technical-backgrounder/) 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](https://www.coindesk.com/opinion/2026/08/17/the-coldcard-hack-proves-reputation-is-not-a-security-model) 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.

## What this means

The failure sits in key generation, which no on-chain audit, multisignature policy or cold storage discipline can compensate for. Holders who generated seeds on affected firmware after March 2021 are exposed regardless of how carefully they have behaved since, and the only remedy is migrating funds to keys made with verified entropy. The commercial consequence runs against self-custody hardware and toward regulated custodians and exchange-traded products, because a buyer cannot audit a closed build pipeline but can read a custodian's insurance and attestations. Manufacturers now face demand for reproducible builds and independent entropy testing as a condition of sale rather than a differentiator.

## What to watch

- Whether the roughly 90 percent of stolen coins that Galaxy says remain unmoved start being laundered through mixers or exchanges, which would show whether attribution and exchange freezes have any practical effect in a case where the private keys, not the platform, were broken.
- Whether other hardware wallet vendors publish reproducible-build and entropy-verification evidence in the coming weeks, since silence from a competitor invites the same question Coinkite is now answering.
- Flows into custodial products and spot bitcoin exchange-traded funds, which would indicate whether risk-averse holders are responding by giving up personal key management.