Coldcard Flaw Exposes Weaknesses in Key Creation: CZ Warns of Risk in Multi-Wallet Security
Binance founder Changpeng 'CZ' Zhao has reignited debate on crypto wallet security after a recent Coldcard flaw exposed weaknesses in key creation. The incident revealed that even hardware wallets can fail before transactions begin, leaving funds vulnerable without phishing or malware.
The weakness was traced to a firmware integration error introduced in March 2021, which allowed attackers to narrow possible inputs and generate candidate seeds offline. Affected software could use a deterministic fallback instead of consistently relying on the hardware random-number generator for unpredictable recovery seeds.
CZ advises dividing holdings across several wallets to limit losses from one failure, citing that no crypto wallet is secure. However, he warns that spreading assets creates new risks, including lost backups and poor recovery planning.