Bitcoin Withdrawals Continue: 8 Years of Storage in a Coldcard Cold Wallet Ended in Zero
Coldcard Hardware Wallet Hacked: Losses Mount Due to Vulnerable Seed Generation
A critical vulnerability in Coldcard hardware wallets has led to a continued wave of fund thefts. According to Galaxy Research, the total stolen has reached 1,367.05 BTC (approx. $88.6 million) from 4,585 addresses, a significant increase from the initial 594.5 BTC reported on July 30, 2026. Most of the stolen funds remain on the attackers' addresses.
The issue is not with the current firmware, which Coinkite has updated, but with seed phrases generated on vulnerable devices between March 2021 and the release of fixed firmware versions. Due to a programmer error, devices switched from using a hardware random number generator to the software-based Yasmarang generator, which was initialized with publicly accessible data like the chip's serial number. This made the seed phrases predictable through offline brute-force attacks, meaning wallets remain at risk until funds are moved to a new wallet generated with the patched firmware.
Affected devices include Mk2/Mk3 with firmware 4.0.1–4.1.9 (and up to 5.0.3), Mk4/Mk5 up to version 5.6.0, and Q models up to 1.5.0Q. The only exceptions are seeds created with a high-entropy method like at least 50 independent dice rolls or a strong unique BIP-39 passphrase. All other owners must generate a new seed on the fixed firmware and transfer their assets.
A case highlighting the human impact involves a 39-year-old long-term investor who lost 2 BTC (approx. $130,000) in minutes. He had accumulated the Bitcoin over eight years through physical labor, viewing it as a financial lifeline and a retirement plan in a country suffering from hyperinflation. His story underscores that even conservative "buy and hold in cold storage" strategies can be compromised by such underlying technical flaws.
From a technical perspective, this incident echoes historical failures where weak random number generators undermined cryptographic security, challenging the assumption that offline storage is automatically foolproof.
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