Coinkite Faces Class-Action Threat Over $88M Coldcard Wallet Bug

Coinkite, the company behind Coldcard hardware wallets, may face class-action lawsuits after users lost over $88 million in BTC due to a vulnerability in its seed generation code. The bug, which affects certain models of the wallet, has resulted in over 1,300 BTC being stolen from affected users.

Thomas Braziel, founder and managing partner of 117 Partners, is studying how to act against Coinkite, mentioning targeting product liability claims and even pursuing a class-action lawsuit. Braziel is coordinating with victims internationally before embarking on these actions.

Felipe Ojeda, a bitcoin advocate in Brazil who lost almost all his capital, has already filed a police report and will introduce a complaint against the company in Brazil. However, he is not hopeful about the future of such actions, acknowledging that Coinkite may not have the financial muscle to make everyone affected whole.

Opinions are divided on whether Coinkite might be held liable for these losses. Cris Carrascosa, CEO of ATH21, stressed that Coinkite had 'zero regulatory responsibility over the funds of the users of its products,' explaining that she was pessimistic about the outcome of any legal action against the company.

However, Ana Ojeda claims there could still be a chance for Coinkite to be held liable, at least in some capacity. While acknowledging that 'there is no automatic right for victims to get every sat back,' there are serious arguments for defect and negligence in Coinkite's actions.