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Coldcard seed flaw prompts $89M Bitcoin theft, triggers wallet migration
Galaxy Digital data points to three suspected attack waves draining 1,367.05 BTC, while CryptoQuant says sub-1 BTC transactions hit the biggest daily total since late 2022.
Coldcard’s wallet vulnerability has been linked to three suspected Bitcoin attack waves that targeted 4,585 addresses and drained 1,367.05 BTC, worth about $89 million, disrupting market sentiment and on-chain activity, according to CryptoSlate, citing analysis from Galaxy Research and Galaxy Digital.
The issue stemmed from affected Coldcard firmware that could generate seed phrases with less randomness than intended. Coinkite released fixed firmware for impacted models, but existing seed phrases could not be repaired through an update, forcing affected holders to generate new wallets and transfer funds to secure addresses.
As the migration began, CryptoQuant research head Julio Moreno said transactions involving outputs of less than 1 BTC reached 39,600 BTC on July 31, the largest daily total for that cohort since November 2022. Bitcoin daily active addresses also jumped from about 645,000 on July 30 to nearly 1 million on July 31, the highest level since Dec. 10, 2024.
CryptoQuant also found exchange deposits for transfers below 10 BTC climbed to 7,300 BTC, its highest level since Feb. 6, and that 77,402 BTC from older unspent-transaction-output bands had moved since the vulnerability became public. CryptoQuant analyst JA Maartunn cautioned that the activity is better read as users securing their wallets rather than broad investor capitulation.
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