Coldcard Wallet Breach Nears $114 Million as Bitcoin Price Holds Steady
The Coldcard wallet security breach has resulted in losses nearing $114 million after a fourth sweep was detected on Monday. Despite the severity of the incident, Bitcoin's price has held steady at around $63,000, with some even speculating that the market is experiencing a calm before a storm.
The issue lies in a bug that affects the device's firmware, specifically versions 4.0.1 through 4.1.9 of the Mk3 model, as well as earlier versions of the Mk4, Mk5, and Q devices. The weakness was caused by a preprocessor guard not checking the build setting for the hardware random number generator, allowing an attacker to reproduce candidate output streams offline.
The operator behind the sweep is believed to have used AI tooling to identify the flaw in Coinkite's open-source firmware. Block has handed over information about the provider used by the attacker to authorities, raising questions about consumer protection and financial regulation.