Coinkite Wallet Hack Exposes Security Lapses in Crypto Industry
Hackers have made off with over $100 million worth of Bitcoin from thousands of supposedly secure 'cold' wallets hosted by Canada-based company Coinkite. The wallets, which were designed to provide nearly impenetrable security through physical hardware keys associated with each account, were infiltrated despite these measures.
The hackers exploited a software bug that allowed them to reconstruct wallet 'seed phrases,' which serve as master keys for accessing the offline wallets. Coinkite warned its clients on July 30 that they were being targeted by this exploit and promised to help affected customers.
Galaxy Research estimated that around $110 million worth of Bitcoin had been drained from approximately 5,000 wallets last week, a figure that grew to at least 7,300 by Monday. The incident highlights the persistent security lapses plaguing the largely unregulated cryptocurrency industry.