CZ Warns: Even Hardware Wallets Can Have Bugs

CZ, the CEO of Binance, has weighed in on the recent ColdCard hardware wallet security issue. The bug allowed attackers to explore seed phrase and private key candidates within a realistic range, potentially leading to asset theft.

ColdCard's developer, Coinkite, has released an updated firmware and is advising affected users to generate new seed phrases and transfer their funds accordingly.

In a series of posts, CZ emphasized that hardware wallets are not immune to bugs, even those with long histories. He also noted that asset diversification can mitigate risks but introduces new ones. Additionally, he highlighted the challenge of securing backup seed phrases, which must be kept confidential and resistant to destruction or unauthorized access.

CZ drew parallels between this issue and a previous bug in Trust Wallet, where users lost $12 million due to a pseudo-random number generator flaw. He stressed that software bugs are inevitable but that the quality of development teams matters.