Coldcard Firmware Flaw Exposed Millions in Bitcoin to Theft
A vulnerability in Coldcard's open-source hardware wallet firmware went undetected for years, resulting in significant Bitcoin losses. Coinkite, Coldcard's maker, suspects an attacker used AI to identify the flaw in earlier code versions.
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The Vulnerability and Its Discovery
A security flaw in Coldcard's firmware allowed attackers to drain Bitcoin from affected wallets, with loss estimates ranging from $38 million to $100 million depending on the source. Coinkite said in a Tuesday statement that it believes an attacker used AI to analyze previous versions of the open-source firmware to locate the vulnerability, which had persisted undetected across multiple releases.
The company did not immediately disclose when the flaw was patched or how long it remained accessible. Coldcard hardware wallets are among the most widely used self-custody devices in the industry, marketed for their focus on security and ease of use.
Why Detection Took So Long
The flaw's persistence underscores a tension in open-source security: while transparency allows community review, it does not guarantee it. Coldcard's code was publicly available throughout the vulnerable period, yet neither independent auditors nor the broader developer community appear to have caught the issue. Coinkite's acknowledgment that an attacker may have used AI to reverse-engineer the vulnerability raises questions about whether human-led code review, even when well-intentioned, is sufficient against automated exploit discovery.
Why It Matters
For Traders
Users holding Bitcoin on Coldcard should audit transaction history and consider moving funds to confirmed unaffected versions or alternative custody solutions immediately.
For Investors
The incident demonstrates that hardware wallet security—a cornerstone of self-custody narrative—remains subject to undiscovered flaws despite years of public code availability.
For Builders
Hardware wallet teams and security-focused protocols should assume attackers have automated tools to identify vulnerabilities in open-source firmware and may need to adopt alternative review models beyond crowd auditing.
This article is for information only and is not financial advice. Read the full disclaimer.
