Recovery Seeds Reportedly Breached for Coldcard Hardware Bitcoin Wallets, $75M Taken (nerds.xyz)
- Reference: 0184807574
- News link: https://it.slashdot.org/story/26/08/02/0145226/recovery-seeds-reportedly-breached-for-coldcard-hardware-bitcoin-wallets-75m-taken
- Source link: https://nerds.xyz/2026/07/coldcard-firmware-flaw-bitcoin-wallet-seeds/
The problem is that anyone who can reproduce the recovery seed doesn't need to possess the COLDCAR, [2]Nerds.xyz points out . More [3]from The Street :
> [The recovery seed] is supposed to come from a hardware random number generator producing 128 bits of entropy, a number so large that guessing it is computationally impossible. It wasn't. According to [4]Block's engineering team a single code change on March 1, 2021 caused the firmware to silently fall back to a software-based generator instead of the hardware one. On Mk3 devices the effective search space collapsed to roughly 40 bits. Coinkite has confirmed that figure and called it preliminary. The gap between 128 bits and 40 bits is not a matter of degree. It is the difference between a lock that cannot be picked and one that can be brute-forced by anyone with rented cloud computing....
>
> [5]Chainalysis found the attacker went after the largest balances first, pulling more than $30 million in the opening ten minutes. Within about 25 minutes, roughly 594 BTC had moved out of some 500 single-signature wallets. One victim lost around $1.8 million... Coinkite has shipped fixed firmware, but with a warning that matters more than the patch itself. Updating does not repair an existing seed. A seed created with weak entropy stays weak forever. Affected users have to generate an entirely new wallet on updated hardware and move their coins to it.
By Saturday morning Galaxy research was tracking 1,158.66 BTC, worth roughly $75.1 million, taken from 2,673 addresses, according to the article. And "The Coldcard exploit is ONGOING," Galaxy Research [6]posted an hour ago on X.com . "Move Coldcard single-sig funds to safe locations immediately!"
> We have reported ~600 addresses we believe to be hackers holding funds stolen from Coldcard-generated weak entropy addresses to federal investigators, industry compliance firms, and cross-industry cyber investigators.
Thanks to Slashdot reader [7]BrianFagioli for sharing the news.
[1] https://www.thestreet.com/crypto/markets/coldcard-hack-just-grew-to-75m-call-your-friends
[2] https://nerds.xyz/2026/07/coldcard-firmware-flaw-bitcoin-wallet-seeds/
[3] https://www.thestreet.com/crypto/markets/coldcard-hack-just-grew-to-75m-call-your-friends
[4] https://engineering.block.xyz/blog/predictable-rng-fallback-and-32-bit-reseed-in-coldcard-firmware
[5] https://www.chainalysis.com/
[6] https://x.com/glxyresearch/status/2083705254172864861
[7] https://www.slashdot.org/~BrianFagioli
seriously - who certified or tested this (Score:3)
When I did pen testing, for the few products that seemed to have any clue what they were doing, I always scrutinized the random number generator. 2^40 is not that big that you can't run it for a short time, create say 2^32 numbers, sort them and look for patterns (in this case you would likely find a collision). Of the companies that seemed to care about security, I'm guessing 60% screwed up random numbers*. It is so prevalent that every tester should be looking at it.
And one entity, the US government, had a non-standard random number generator, that they couldn't explain in the original version of Open SSL (yes the US government paid for it). It did pass all the randomness tests I tried but it wasn't the algorithm they claimed. With random number generators you "merge" in entropy from a physical source into your entropy pool because your physical source could have a "bias" or uneven distribution to its bits.
Re: (Score:3)
40 bit is within reach of practical guessing attacks. 128 bit is not, but just barely (the limit where it becomes reliably unguessable is somewhere in the 80...100 bit range). If you are serious about things you use at the very least 256 bit. And, obviously, you do independent expert review on any major change. This one is so abysmally insightless and bad, it may well have been an intentionally placed backdoor. I wonder whether they can still reliably say who did the change.
As to who certified that, this is
silently? (Score:3)
Does that mean they have never run their code changes in a test environment to see what they do? Perhaps under a debugger? Also, why was it even possible to fall back to such a weak keylength?
Fuck you for posting this (Score:2)
Crypto is fucking stupid. You know who cares about crypto? Fucking morons.
The magic 8-ball says lawsuits incoming.... (Score:2)
Coinkite may be toast.
So one should probably wonder (Score:3)
> According to Block's engineering team a single code change on March 1, 2021 caused the firmware to silently fall back to a software-based generator instead of the hardware one.
What are the odds that a COLDCARD insider has been playing the long game, and it just payed off?
Unsurprising (Score:2)
Crypto kids: Code is Law!
Computer grey hairs: That's a fucking stupid idea.
Criminal activity in the crapto space. Who cares? (Score:5, Insightful)
Seriously, this abysmally bad idea has no place in the news. Only blithering idiots are still in there.
Re: (Score:2)
We get it, you're a five-digit ID who dismissed bitcoin when it was originally making noise on /. in 2009/2010 and you're mad you missed out on life-changing wealth.
Sour grapes are a real thing for a lot of slashdotters, but if this were a hack of a github repo that resulted in your PII being stolen, you wouldn't be so dismissive.
Re: (Score:2)
Hahahaha, no. I am a bit more sophisticated than you are. Stop projecting.
Re: (Score:2)
What exactly are you claiming as projection? Please be specific.
Slashdot has obviously declined dramatically over the years, but it's sad to see the graybeards resorting to ad hominem.
Re: (Score:3)
So you're claiming you have life changing wealth from Bitcoin? What island did you buy?
Re: Criminal activity in the crapto space. Who car (Score:2)
Forget 5 digit /. User ID, I'm old enough to remember the phone company use to mail books with PII called phone books to everyone.
Re: (Score:2)
I put a whole paycheck of about 4k after taxes in ethereum during 2016 and put it on a Trezor hardware wallet where it stayed until last year. I didn't buy more because of the chorus of voices on here and elsewhere talking about how dumb it was. It was the best investment I ever made. That single paycheck now looks like three years' salary (if I was still working). What originally was enough to buy a beat up old Honda can now buy a Ferrari.
Re: (Score:2)
Slashdot introduced me to bitcoin in 2010 and, as a result, I turned a few hundred dollars into a few hundred thousands. Unlike gweihir, you and I are not luddites.