Coldcard Alerts to Potential Seed Phrase Risk in Mk3 Wallets; Security Experts Investigate $38.3M BTC Transfer

Huo Xing Cai Jing reports that Canadian hardware wallet manufacturer Coinkite has issued a security advisory, urging users who generated mnemonic phrases on Coldcard Mk3 devices with firmware versions 4.1 to 5.3 to migrate their assets immediately. The company stated that preliminary analysis indicates wallets using BIP-39 passphrases are at lower risk, and Mk4, Q, and Mk5 devices are unaffected; the investigation is ongoing. Meanwhile, security researchers are investigating an unusual transfer involving 594.48 BTC (approximately $38.3 million). AnchorWatch CEO Rob Hamilton noted that the attacker moved 1,324 UTXOs across 500 transactions within three blocks and speculated that the issue may stem from insufficient entropy during wallet generation. Wizardsardine CEO Kevin Loaec suggested the vulnerability could be linked to a software library, secure chip, or a specific device batch or firmware version with a low-entropy random number generator, and that attackers may be using AI-generated scripts to brute-force affected wallets. There is currently no conclusive evidence directly linking this fund transfer to the Coldcard Mk3 vulnerability.