Hackers hit Bitcoin’s safest hiding place in ongoing attack
Hackers exploited a software flaw in Coldcard Bitcoin wallets, causing significant financial losses. This vulnerability affected the security keys used to protect user cryptocurrency holdings. Millions of dollars have been siphoned from thousands of compromised wallets globally. The flaw involved a predictable seed phrase generation mechanism within the devices. Coinkite has released updated…
Hackers have exploited a flaw in Coldcard, a hardware device designed to store Bitcoin in "cold" wallets considered highly secure. The vulnerability, discovered by Galaxy Research, allowed attackers to drain tens of millions of dollars from over 4,500 wallets. Coldcard wallets are meant to be offline and therefore safe from internet threats.
However, the software flaw in the random-number generator, which creates the "seed phrase" used for wallet access, made the keys predictable. This enabled attackers to systematically drain wallets by recalculating the keys. Coinkite, the manufacturer, acknowledged the vulnerability and released updated firmware. The security breach has drawn attention for its impact on cryptocurrency security, despite the overall loss being lower than the previous year.
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