Coldcard Exploit Pushes Users Back to Wall Street Amid $130 Million Heist

The recent Coldcard hardware wallet exploit has resulted in significant losses for users. At least 1,596 BTC ($64,110) have been stolen from around 7,300 addresses, with Galaxy Research confirming three major attack waves and 14 smaller incidents.

A possible fourth wave could increase the total to 2,055 BTC ($130 million), but this is currently pending additional victim reports. The firm has identified at least 15 attackers exploiting the vulnerability, with around 73 victims seeking help from Galaxy's head of research, Alex Thorn.

The thefts stem from a flaw in Coldcard firmware dating to March 2021. A coding error allowed attackers to reconstruct private keys remotely without obtaining the device or owner's recovery words. Updating the firmware prevents the creation of additional weak seeds, but it cannot protect wallets whose recovery phrases were already generated through the flawed process.

Coldcard users are racing to replace exposed seeds and transfer their Bitcoin into newly generated wallets. This has driven Bitcoin network activity to multi-month highs, with 712,000 active addresses over the past seven days and transactions worth more than $100,000 reaching a five-month high.