Mars Finance reports that Coinkite’s hardware wallet, Coldcard, has been exposed to a severe entropy vulnerability undetected since 2021, resulting in over $100 million in Bitcoin theft, primarily affecting users of single-mnemonic wallets. The weak entropy allowed attackers to guess private keys through customized methods, prompting the Bitcoin community to reevaluate the reliability of single-signature self-custody. In this context, multi-vendor multisig has emerged as the recommended new custody baseline for long-term holders. This approach requires users to construct a multisig address using keys from different wallet vendors—for example, combining Trezor Safe 7, Ledger Nano, and Casa recovery keys into a 2-of-3 multisig—to reduce reliance on any single hardware vendor. Multisig also defends against wrench attacks and has enabled Bitcoin insurance services denominated in BTC, such as AnchorWatch. However, multisig has drawbacks: users must not only safeguard the threshold keys but also retain copies of the multisig script or template to independently recover funds if wallet services go offline.
Coldcard Entropy Vulnerability Exposes Single-Signature Risks; Multi-Vendor Multisig Becomes New Bitcoin Custody Standard
MarsBitShare
Summary
Bitcoin news: A critical entropy vulnerability in Coldcard hardware wallets, undetected since 2021, resulted in over $100 million in stolen Bitcoin. Weak entropy enabled attackers to guess private keys, revealing risks associated with single-seed wallets. In response, multi-vendor multisignature setups are emerging as the new custody standard. Solutions such as 2-of-3 configurations using Trezor, Ledger, and Casa keys mitigate single-vendor risk. Services like AnchorWatch now offer BTC-denominated insurance. Users must also securely store multisig scripts for recovery. This vulnerability underscores the industry’s shift toward more robust security models.
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