How bitcoin cold wallets lost $70 million in an attack that never touched the devices

Aug 1, 2026

Summary

• More than 1,000 bitcoin, worth about $70 million, were drained from 1,196 Coldcard wallets in a 41-minute span on July 30, nearly double the loss first reported.
• Researchers say a firmware flaw in certain Coldcard hardware wallets made supposedly unguessable seed phrases computationally enumerable, allowing attackers to reconstruct private keys without ever touching the devices.
• Security firms warn that more wallets could be hit because owners cannot reliably tell if their seeds were generated on vulnerable firmware.

Galaxy Research mapped the full event: 1,082.65 BTC swept between 01:10 and 01:51 UTC across six blocks. Proceeds sit in four addresses and have not moved. Early reporting captured only one destination address.

Mechanism

Coldcard firmware was meant to draw seed entropy from a dedicated hardware RNG. An internal build setting told it to skip that generator, and a supporting library checked only whether the setting existed rather than whether it was switched on. Key generation fell through to a software substitute seeded from chip serial number and clock registers.

Security teams found generation could be determined on older Mk2 and Mk3; on Mk4, Q and Mk5 they put the range at roughly four billion possibilities. Attackers generate candidate seeds offline, derive addresses, and check against the public blockchain—victim devices never need to be accessed.

Of drained wallets: 1,183 native SegWit, seven older standard, six older still—consistent with systematic seed testing across derivation paths.

Vendor / researcher disagreement on scope

Coinkite warned Mk3 owners and says newer devices are unaffected; Block’s report places Mk2, Mk4, Q and Mk5 in scope as well. Upgrading firmware does not repair seeds generated under vulnerable software.

Block’s Clay Garrett said the operator used a paid account at a well-known blockchain data provider during sweeps; provider logs matched timing/sequence; information passed to authorities.

Related technical analysis: https://engineering.block.xyz/blog/predictable-rng-fallback-and-32-bit-reseed-in-coldcard-firmware