Coinkite Slammed by $88M in Bitcoin Losses Amid Coldcard Vulnerability

Coinkite, the company behind Coldcard hardware wallets, is facing potential class-action lawsuits after a vulnerability in its seed phrase generator led to the loss of over 1,300 BTC worth $88 million. The bug allowed attackers to generate random seed phrases, compromising user funds.

Thomas Braziel, founder and managing partner of 117 Partners, is coordinating efforts with victims internationally to pursue product liability claims and a class action lawsuit against Coinkite. Braziel acknowledges that the company may not have the financial resources to compensate all affected users.

Felipe Ojeda, a bitcoin advocate in Brazil who lost nearly all his capital, has already filed a police report and plans to file a complaint against Coinkite. However, he is pessimistic about the outcome, citing the company's limited financial muscle.