🚨 Coldcard Mk3 Entropy Bug: What Happened & What You Should Do 💰 What Happened? Between July 30-31, 2026, an attacker drained approximately 594.48 BTC (~$38M) from around 500 single-signature Bitcoin wallets in a highly coordinated attack. On-chain Highlights - 🪙 594.48 BTC stolen - 👥 ~500 affected wallets - 📦 1,324 UTXOs swept - ⏱️ Completed in ~25 minutes - 💸 Very low total fees (~0.044 BTC) - 🔒 No multisig or Taproot wallets were affected - 💤 Most wallets had been inactive since 2021-2026 🛑 Root Cause: A 5-Year-Old Firmware Bug A subtle firmware bug caused some Coldcard hardware wallets to generate Bitcoin seeds with far less randomness than intended. What went wrong? - In March 2021, Coldcard changed its seed generation code. - Due to a build configuration issue, the firmware accidentally used a weak software PRNG instead of the hardware True Random Number Generator (TRNG). - The bug remained unnoticed for five years. Effective Entropy Mk3 - Intended: ~128 bits - Actual: ~40 bits Mk4 / Mk5 / Q - Better than Mk3, but still reduced - Around ~72 bits before patched firmware That reduction makes offline brute-force attacks dramatically more practical. ⚠️ Affected Devices Coldcard Mk3 - Firmware 4.0.1 → 5.0.3 Coldcard Mk4 / Mk5 - Seeds created before 5.6.0 Coldcard Q - Seeds created before 1.5.0Q Not Affected - ✅ TAPSIGNER - ✅ SATSCARD - ✅ OPENDIME 🚨 Important Updating firmware does NOT fix an existing weak seed. If the seed was created using vulnerable firmware, you must create a brand new seed and migrate your funds. ✅ What Should You Do? If your wallet may be affected: 1. Update to the latest firmware. 2. Generate a completely new seed. 3. Verify your backup and receive address on the device. 4. Send a small test transaction. 5. Move the remaining BTC after verification. Temporary Protection If you only have a Mk3: - Use a strong, unique BIP-39 passphrase (not your PIN), then migrate. - Or generate a new seed using the pure dice-roll method, which bypasses the faulty RNG. Dice Entropy Using 50+ private dice rolls during seed creation provides enough entropy to protect against this specific bug. 🏦 Coinkite's Response - Published an official security advisory. - Confirmed the entropy bug. - Investigating the incident. - Has not officially confirmed the 594 BTC theft was caused by this vulnerability, though independent security researchers strongly believe it is the most likely explanation. 🔐 Key Takeaways - Open source does not guarantee bugs are found quickly. - Hardware wallets are only as secure as their randomness. - Strong BIP-39 passphrases, independent entropy, and multisig significantly improve security. - Always verify addresses and backups on the device before moving funds. Final Thought This incident is a reminder that self-custody isn't just about owning your keys. It's about ensuring those keys were generated securely. If your seed was created on affected firmware, stay calm, verify everything carefully, and migrate to a new secure seed as soon as possible.