Coldcard Exploit Highlights Hardware Wallet Vulnerabilities

Binance founder Changpeng 'CZ' Zhao is sounding the alarm about hardware wallet security after an exploit drained tens of millions of dollars in Bitcoin from Coldcard devices.

The issue was caused by a firmware build error in March 2021, which drew seeds from a software fallback instead of the device's hardware random-number generator, making private keys easier to guess.

The flaw has resulted in losses of around $70.2 million, with 1,196 addresses drained in a 41-minute window on July 30.

CZ warns that even established wallets can have bugs and advises holders to spread their funds across multiple wallets to mitigate risk, but notes that no setup is foolproof.