Galaxy Research has revised its estimate of the Coldcard wallet hack, now linking 1,596 Bitcoin (BTC) — worth over $100 million — to the exploit. The attack targeted approximately 7,300 addresses across three major waves and 14 smaller incidents. A suspected fourth wave could push total losses to 2,055 BTC, or roughly $130 million.
Galaxy Raises Confirmed Theft Estimate
Researchers at Galaxy received reports from 73 victims, which helped verify the three primary attack waves. The reports also revealed smaller transaction patterns that may involve other attackers exploiting the same vulnerability. The updated figure far exceeds the initial estimate of $70 million, as investigators continued to identify new addresses, victims, and transaction groups while the attacks unfolded.
The first major wave began on July 30, draining approximately 1,082.65 BTC from 1,196 addresses in just 41 minutes. At the time, that Bitcoin was valued at about $70.2 million. Two subsequent waves followed. By August 2, researchers had traced roughly 1,367 BTC across 4,585 addresses. The third wave took about 208 BTC from 1,912 smaller accounts.
Galaxy noted that each wave followed a consistent pattern, suggesting a single operator, but researchers could not definitively link every wave to the same attacker. It remains possible that additional attackers joined after the vulnerability was disclosed.
Weak Seeds Exposed Private Keys
The attackers did not compromise the Bitcoin network itself. Instead, they targeted recovery seeds generated by certain Coldcard firmware versions that used weak random data. A hardware wallet should generate a recovery seed from secure, unpredictable information — a process that creates entropy and protects private keys from offline guessing.
Coldcard introduced the flaw during a firmware update in March 2021. Seed generation shifted from the device’s hardware random-number generator to software within the libNgU and MicroPython stack. An integration error then routed the process to MicroPython’s deterministic fallback, which relied heavily on device details and timing values. This drastically reduced the number of possible seeds, allowing attackers to generate candidate seeds offline, derive related Bitcoin addresses, and compare them with addresses on the blockchain — all without physical access to a victim’s device.
Coinkite Lists Affected Firmware Versions
Coinkite estimates that affected Mk2 and Mk3 wallets produced only about 40 bits of effective entropy. Mk4, Mk5, and Q models reached approximately 72 bits, still below the intended 128 bits. The advisory covers Mk2 and Mk3 firmware versions 4.0.1 through 4.1.9, Mk4 and Mk5 standard firmware before 5.6.0 and Edge firmware before 6.6.0X, and Coldcard Q standard firmware before 1.5.0Q and Edge firmware before 6.6.0QX. TAPSIGNER, OPENDIME, and SATSCARD use separate codebases and are not affected.
The alert coincided with heavy movement from small Bitcoin addresses. Transfers below 1 BTC reached 39,600 BTC in one day, according to CryptoQuant research head Julio Moreno — the highest daily movement in that category since November 2022, when users moved about 39,900 BTC shortly after FTX collapsed. While not every transfer came from a Coldcard user, the timing suggests that some holders shifted funds to new wallets or exchanges after the security warning.
Conclusion
Galaxy Research has confirmed 1,596 BTC in losses across three attack waves and 14 smaller incidents. The flaw weakened recovery-seed randomness in several Coldcard firmware versions. Users with affected devices should follow Coinkite’s advisory and move funds to wallets created with secure, updated software.
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