Coldcard Wallet Incident Expands: Loss Estimate Rises to $70M
Vexoda Newsroom
Galaxy Research identified over 1,196 Coldcard wallet addresses that lost a combined 1,082.65 Bitcoin, raising the estimated loss value to $70 million.
In an update on the ongoing Coldcard wallet incident, Galaxy Research has expanded their analysis and reported a significant increase in the potential losses associated with the security breach. The research arm of crypto investment company Galaxy Digital identified 1,196 addresses that lost approximately 1,082.65 Bitcoin (BTC) during a 41-minute window on July 30th.
The latest findings come after earlier estimates by AnchorWatch CEO and co-founder Rob Hamilton, who had previously analyzed the incident and estimated around 594.48 BTC were lost in about three blocks of transactions. Galaxy Research’s broader scope now includes a more detailed examination of Bitcoin movements between 1:10 AM and 1:51 AM UTC on July 30th.
Key to their analysis, Galaxy Research noted that the affected addresses shared similar patterns such as identical transaction fees (30 satoshis per virtual byte) and lack of change outputs. This pattern suggests a coordinated attack exploiting vulnerabilities in Coldcard’s firmware. However, it also implies that future attacks may not follow this exact same fingerprint.
Coldcard, the wallet provider involved, has taken responsibility for the firmware bug and released a hotfix to remove the software fallback path. Coinkite co-founder Rodolfo Novak warned users who generated seeds on vulnerable firmware to move their funds to a new seed as an additional precautionary measure.
The expanded loss estimate of $70 million underscores the severity of the incident, impacting not just individual wallets but potentially setting a precedent for future crypto wallet security. This development is significant in the broader context of self-custody practices and highlights the ongoing challenges faced by hardware wallet providers in maintaining user security.
For traders and investors, this news serves as a reminder to stay vigilant about firmware updates and security patches, especially when using hardware wallets. The incident also prompts further scrutiny into the robustness of cold storage solutions and their susceptibility to advanced attacks.
Source: Cointelegraph. Summarized and rewritten by the Vexoda Newsroom. This is market news, not financial advice.