For many Bitcoiners (BTC), the past two days have been particularly difficult due to a hack which Strike CEO Jack Mallers labeled “one of the most serious wallet security incidents Bitcoin has seen”.
The Coldcard wallet drain, revealed by Block’s engineering team, had discovered that some Coldcard firmware silently defaulted to a weak, deterministic software random number generator rather than the device’s hardware RNG, a bug that goes back to March 2021, Mallers said on Friday, urging users of the hardware wallet to check their setup right away.
However, Mallers warned that just putting a compromised seed back onto a new wallet won't fix the issue, as the problem was how the seed itself was generated. He recommended that impacted users move funds to newly created wallets on unaffected hardware and provided Strike as a temporary exchange option in the meantime.
Galaxy (GLXY) Research explained on Friday that 1,196 addresses were fully swept for 1,082.65 BTC, worth roughly $70.2 million, within a 41-minute window on Thursday. Every sweep paid an identical, hardcoded fee far above market rate and left no change output, a pattern Galaxy Research said pointed to an automated tool rather than owners moving funds.
Binance (BNB) co-founder Changpeng Zhao also commented on the incident, saying that “even hardware wallets can have bugs” and “nothing is 100%,” suggesting users consider splitting funds across multiple wallets as a mitigation, while noting that approach has its own risks.
All Bitcoin wallets are constructed from a single large random number used to generate the private keys.
As long as it's truly random, guessing it is effectively impossible. Block's engineering team found on Thursday that certain Coldcard firmware silently failed to use the device's hardware random number generator due to a bug dating to March 2021, falling back instead to a far more predictable software generator. Because the flaw sits in how the seed itself was created, the weakness carries over to any wallet built from that same seed.
Bitcoin's price was trading around $63,000, down about 2.7% over the past 24 hours. On Stocktwits, retail sentiment around the apex cryptocurrency remained in the ‘bearish’ zone, accompanied by ‘low’ chatter levels over the past day.
Read also: Democrats Reportedly Circulate Anti-Crypto Poll Ahead Of CLARITY Act Vote, Coinbase Exec Calls It A 'Message-Testing Memo'
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