- Published on
How bitcoin cold wallets lost $70 million in an attack that never touched the devices
- Authors
- Name
- DeepHorus
Over 1,000 bitcoin, worth about $70 million, were drained from 1,196 Coldcard hardware wallets in a 41-minute span on July 30, according to a new analysis by Galaxy Research. The theft targeted users of the popular offline storage devices, yet the attacker never physically accessed them. Instead, a firmware flaw made supposedly unguessable seed phrases computationally enumerable, allowing private keys to be reconstructed remotely. This nearly doubles the loss first reported when the incident surfaced.
Hardware wallets are designed to keep private keys offline, isolated from internet-borne threats. When a wallet is created, the device is supposed to generate a seed number so large and unpredictable that guessing it is impossible. Coldcard's firmware was meant to draw that number from a dedicated hardware randomness generator. An internal build setting skipped that generator, and a supporting library check only tested whether the setting existed, not whether it was enabled.
Key generation fell back to a basic software substitute seeded from the chip's serial number and clock registers. The serial number is fixed factory metadata, and clock values are timing state an attacker can narrow down or measure on their own device. This collapsed the possible key range from astronomically vast to about four billion possibilities on the Mk4, Q, and Mk5 models. On older Mk2 and Mk3 devices, the range was even smaller, making them more vulnerable.
Galaxy Research mapped the full event, finding 1,082.65 BTC swept between 01:10 and 01:51 UTC across six blocks. Three intervening blocks contained nothing, indicating transactions were broadcast in batches rather than continuously. The stolen funds now sit in four addresses and have not moved. Early reporting captured only one of those addresses, which is why the loss figure has grown.
The attack's mechanism is what makes it unusually significant. Most crypto theft requires breaching an exchange, tricking a smart contract, or phishing a key. Here, the attacker generated candidate seeds on their own hardware, derived the addresses each would produce, and checked them against the public blockchain. The victim's device was never involved; it could have been powered off in a safe on another continent.
Security firms warn that more wallets could be hit because owners cannot reliably determine whether their seeds were generated on vulnerable firmware. The attacker appears to have systematically enumerated wallets, targeting 1,183 modern native segwit addresses, seven older standard addresses, and six from an even older format simultaneously. Investigators are tracing the attacker through logs from a blockchain data provider, but the funds remain unmoved.
This incident underscores that offline storage alone is not a guarantee of security. The threat model must include the integrity of the device's random number generation, not just distance from the network. As the attacker continues searching for additional vulnerable wallets, the crypto community faces a stark reminder that hardware wallets are only as strong as their weakest firmware link.
