Coldcard Hackers Drain Over $112 Million Worth of Bitcoin Using AI-Powered Attack

A coordinated attack on Coldcard hardware wallets has resulted in the theft of over 1,778 Bitcoin, worth more than $112.7 million, from over 8,600 individual wallet addresses.

The attack began on July 30 and continued until August 6, with hackers exploiting a firmware vulnerability that originated from a Coinkite update in March 2021. The vulnerability allowed attackers to drain funds from wallets in just 41 minutes.

An investigation by Galaxy Research found that the attackers likely used unrestricted artificial intelligence models to identify and weaponize the security flaw. Cybersecurity experts noted that AI safety regulations at American research facilities prevented them from utilizing comparable defensive tools, forcing protection teams to rely on the same Chinese open-source AI platforms as the attackers.

A critical warning for affected users is that installing updated firmware will not resolve the underlying security issue, and any seed phrase created using compromised firmware remains permanently vulnerable. Users must generate a new seed phrase using patched firmware versions and transfer all holdings to freshly created wallets.