Coldcard wallet attack drains up to $89M in Bitcoin from 1,200+ addresses
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President Trump has signed an executive order establishing a government reserve of bitcoin. LiveNOW from FOX’s Josh Breslow was joined by Alan Orwick, the co-founder of Quai Network, to break down the significance.
Forbes first reported the attacks, which researchers at Galaxy Research say drained more than 1,000 bitcoin from 1,196 digital wallets in just 41 minutes on July 30.
Galaxy later identified two additional suspected waves of suspicious activity, bringing the estimated losses to nearly $89 million.
The issue involves Coldcard, a handheld device many cryptocurrency investors use to store bitcoin offline instead of leaving it on a cryptocurrency exchange. Often called a “hardware wallet,” the device is designed to keep hackers from accessing a user’s bitcoin over the internet.
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The company said it released its findings because it believes the attacks are still happening, though researchers cautioned they are continuing to study exactly how the vulnerability is being exploited.
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Instead, Coinkite is urging those users to create a brand-new recovery phrase using the updated software and move their bitcoin into the newly secured wallet.
Coinkite also warned that moving the same recovery phrase into another wallet does not solve the problem because the weakness follows the recovery phrase itself, not the physical device.
“I’m sorry and I’m devastated,” Novak wrote. “Our team is heartbroken about yesterday’s news.”
“If you generated a seed using a Coldcard wallet, move your funds now, using our updated best practices, before reading further,” he wrote.
“If you know anyone who owns a Coldcard, please make sure they see this,” Novak wrote. “Some affected users may not be watching social media right now, and every hour matters.”
“We do not have full attribution or scope of the issue yet, and we won’t speculate until our full technical evaluation is complete,” Novak wrote.
The warning quickly spread across the cryptocurrency industry.
While the initial warning focused on older Coldcard devices, Coinkite has since expanded the list of affected products to include additional models and software versions.
Block emphasized that none of its own products or customers are affected by the vulnerability. The company said it published its findings after working with anonymous security researchers and receiving reports from Coldcard users.
“Our recommendation is to continue to use your Bitkey normally,” Bitkey developer Clay Garrett wrote on X.
“Our assessment is this presents no risk of remote drains or immediate funds loss,” Garrett wrote.
Find more updates on this story at FOXBusiness.com.
Original source: https://www.livenowfox.com/money
