The Technical Failure: "Predictable Entropy"
Published 8/3/2026, 10:04:05 PM
The $70M drain from Coldcard cold wallets was the result of a critical firmware vulnerability that caused the devices to generate predictable seed phrases. On July 30, 2026, attackers exploited this flaw to sweep approximately $88.6 million (1,367.05 BTC) from thousands of addresses in a highly automated attack [Source: https://blog.coinkite.com/coldcard-mk3-seed-generation-warning/].
The Technical Failure: "Predictable Entropy"
The root cause was a firmware integration error introduced in March 2021 (v4.0.0). A code change caused the Coldcard to bypass its secure hardware Random Number Generator (RNG) and fall back to a weak software pseudorandom number generator (PRNG) called Yasmarang [Source: https://engineering.block.xyz/blog/predictable-rng-fallback-and-32-bit-reseed-in-coldcard-firmware].
- Entropy Collapse: Instead of 128 bits of true randomness, the software fallback was seeded only by the chip's Unique ID (UID) and boot-time registers. This reduced the possible seed combinations to a range small enough to be brute-forced offline [Source: https://engineering.block.xyz/blog/predictable-rng-fallback-and-32-bit-reseed-in-coldcard-firmware].
- Offline Reconstruction: Attackers did not need physical access to the wallets. They pre-calculated the predictable seeds and monitored the blockchain for any funded addresses matching those seeds.
The Attack Timeline (July 30, 2026)
The exploit was executed with extreme speed and precision, suggesting the use of custom-built automated tools.
| Metric | Value |
|---|---|
| Initial 10-Minute Drain | ~$30 Million [Source: https://kucoin.com] |
| Initial 41-Minute Drain | $70.2 Million (1,082.65 BTC) [Source: https://blog.coinkite.com/coldcard-mk3-seed-generation-warning/] |
| Total Estimated Losses | $88.6 Million (1,367.05 BTC) [Source: https://blog.coinkite.com/coldcard-mk3-seed-generation-warning/] |
| Total Addresses Affected | 4,585 addresses [Source: https://blog.coinkite.com/coldcard-mk3-seed-generation-warning/] |
Affected Devices and Versions
The vulnerability is tied to when the seed was generated. If a seed was created using the following firmware versions, it is permanently compromised, even if the device is updated later.
| Model | Vulnerable Firmware Versions | Fixed Version |
|---|---|---|
| Mk2 / Mk3 | v4.0.0 – v4.1.9 | v4.2.0+ |
| Mk4 / Mk5 | All versions before v5.6.0 | v5.6.0+ |
| Q | All versions before v1.5.0Q | v1.5.0Q+ |
Who Was Safe?
Not all Coldcard users were at risk. Users were protected if they utilized specific security features that bypassed the internal RNG:
- Dice Rolls: Users who provided their own entropy by entering 50+ physical dice rolls during setup were not affected [Source: https://blog.coinkite.com/coldcard-mk3-seed-generation-warning/].
- BIP-39 Passphrases: A strong passphrase added a layer of entropy that attackers could not predict, keeping those funds secure.
- Multisig: Wallets were safe if the multisig quorum included at least one device or key not generated by the faulty Coldcard firmware.
Required Remediation
Updating the firmware does not fix a compromised seed. Affected users must update to the latest patched firmware, generate a completely new seed, and transfer all funds from the old addresses to the new ones immediately [Source: https://blog.coinkite.com/coldcard-mk3-seed-generation-warning/].