Coldcard Hacking Losses Exceed $100 Million, Ripple CTO Warns

The hacking incident exploiting a firmware vulnerability in the Bitcoin hardware wallet Coldcard has resulted in losses exceeding $100 million. According to Galaxy Research, at least 1,596 BTC has been stolen in three attacks, and if a fourth attack occurs, the total losses could rise to $130 million. Ripple's honorary CTO David Schwartz pointed out that this incident highlights the risks associated with self-custody. The vulnerability in Coldcard stems from an implementation error in firmware version 4.0.1, released in March 2021, which failed to properly utilize the hardware-based random number generator during the seed generation process, reducing the seed entropy to 40 bits. Galaxy Research reported that the first major attack occurred on the 30th of last month, with over 1,000 BTC stolen from more than 1,200 addresses. CoinKite has released a firmware update to fix the vulnerability but emphasized that existing seeds are not safe and recommended generating new seeds. Schwartz mentioned that unlike traditional finance, there is no insurance for self-custody of digital assets.

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