- Published on
Major bitcoin wallet flaw drains 594 BTC in 25-minute sweep
- Authors
- Name
- DeepHorus
A critical flaw in Coldcard hardware wallets allowed an attacker to drain roughly 594 bitcoin, worth about $38 million, from around 500 single-signature wallets in a 25-minute sweep on Friday. The theft occurred between 01:31 and 01:56 UTC, with funds moved in 500 transactions and consolidated into a single address that has yet to move. The incident highlights how even ostensibly secure offline storage can be undermined by subtle firmware mistakes.
Coldcard, made by Canadian firm Coinkite, is a hardware wallet designed to keep bitcoin keys offline. The vulnerability was introduced in firmware 4.0.0 in March 2021, after a commit dated March 1, 2021. That firmware caused devices to skip their hardware randomness generator and fall back to a predictable software-based key generation method. The seeds were meant to be impossible to guess, but the fallback made them guessable.
The attack moved 1,324 chunks of bitcoin across 500 transactions inside a three-block window. 562 BTC were then consolidated into a single address that has not moved. All drained wallets were single-signature and held more than 0.15 BTC. Many had been dormant for years, with coins spanning 2021 to 2026, matching the flaw's age almost exactly.
According to Block's Bitcoin engineering and security teams, a build setting told the device to skip its own hardware random generator, and a check in a supporting library tested only whether that setting existed rather than whether it was enabled. Key generation fell back to a software substitute seeded from the chip's serial number and clock registers, neither of which is secret. The serial number is fixed factory metadata, while clock values can be narrowed down or measured on a similar device. Coinkite warned users who created seeds on Mk3 devices running firmware 4.0.1 or later.
The exposure depends on the firmware version running when a wallet was first created, not when the hardware was purchased. Coinkite stated that "Mk4, Q and Mk5 are not affected based on our early analysis." However, the flaw also impacts paper wallet private keys, seed-splitting masks, device cloning keys, and Key Teleport transfers. This broadens the scope beyond just wallet seeds.
Block said it disclosed the findings to Coinkite, whose team acknowledged them. Both companies describe their analyses as preliminary, and Block noted it published without full testing because exploitation was already under way. The coordinated nature of the attack suggests the actor may have prepared for a long time. Users are urged to move funds from potentially affected devices immediately.
Despite the significant loss, bitcoin traded above $64,000 in early Asian hours, with the widespread drain having little visible impact on the market. The attack serves as a reminder of the importance of randomness in cryptography. Further analysis from Coinkite and Block is expected as investigators examine the full extent of the vulnerability. For now, the stolen funds remain in a single address, and the attacker has not moved them.
