Coldcard Wallets Compromised: Hackers Drain $70M in Bitcoin

A severe security breach has compromised thousands of Coldcard wallets, one of the most trusted hardware wallet solutions for Bitcoin holders. The exploit, discovered by Block's engineering team, allowed hackers to drain funds from affected addresses within a 41-minute window on Thursday.

The issue stems from a firmware bug that dates back to March 2021, which caused certain Coldcard devices to default to a weak software random number generator instead of the built-in hardware RNG. This weakness carries over to any wallet created using the compromised seed.

Strike CEO Jack Mallers described the breach as 'one of the most serious Bitcoin wallet security incidents' and urged users to verify their setup immediately. He recommended that impacted users move funds to newly created wallets on unaffected hardware, with Strike offering a temporary exchange option in the meantime.

Binance co-founder Changpeng Zhao noted that even hardware wallets can have bugs and suggested diversifying funds across multiple wallets as a mitigation strategy. However, he also acknowledged that this approach has its own risks.