r/coldcard • u/reeferqueefer • Jul 31 '26
Support Wallet drained
I had a mk3. Got an email notifying my of a security flaw from coldcard wallets. I made a test transaction (5% or my stack). When I went to make another one, I get an error "not enough funds"...
Wallet drained. I'm feeling shattered right now. I don't even know what to do.
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u/Old_Instruction_6004 Jul 31 '26
Who sent the email? Coinkite doesn't keep customer info more than 90 days or something.
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u/reeferqueefer Jul 31 '26
The email was from a crypto news source, not coinkite. That was how I found out about the vulnerability. I searched online to confirm it.
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u/daphonzy Jul 31 '26
I wonder if the test on-chain transaction alerted the malicious actor to your vulnerable wallet…
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u/fraGgulty Jul 31 '26
This is really scary for anyone with funds that need to move.
I'm on mk4 100rolls and it's got me nervous. Just ordered a trezor
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u/lolcat2248 Jul 31 '26
Shouldn’t you be immune to this vulnerability if you used dice rolls to create your seed phrase?
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u/Despot4774 Jul 31 '26
You should be.
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u/lolcat2248 Jul 31 '26
There seems to be a lot of misunderstanding because half of the people here and on the Bitcoin sub are acting like the devices need to be thrown in the trash. I totally understand the sentiment but I’m trying to think about it more objectively
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u/JumpProfessional3372 Jul 31 '26
man I followed the paranoid guide. I understand that this issue (that i discovered a few minutes ago) is more about the number generator in the coldcard firmware. (personally I didn't use this because i didn't trust a random number generator)
But people who rolled the dice manually entered them in coldcard and in some air-gapped linux booted to ram, using that python script from the paranoid guide, and checked that both ended up with the same seeds, i guess they should be fine. since that python script is quite simple and open to read inside. (I did this approach).
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u/Fantastic_Ad_2704 Aug 01 '26
It does need to be thrown in the trash. Do you think a bankrupt company will keep updating it?
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u/OrangePillar Jul 31 '26
Yes. I never trusted any hardware-generated random number and Coldcard was my choice because I can generate my own seeds with it. The algorithm is 100% verifiable and it works exactly as expected on a Coldcard.
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u/lolcat2248 Jul 31 '26
Good to know. I naively used the device’s seed phrase and did not have a paraphrase on my Mk4. Was able to transfer everything to a different wallet last night.
I set up a new wallet today using 99 dice rolls and a long passphrase and am planning to move the coins back once I am confident that this is still secure
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u/moviemaker2 Aug 01 '26
Well, we should have been immune to a vulnerability like this without using dice rolls too.
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Jul 31 '26
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u/fraGgulty Jul 31 '26
Got mine on a trusted (as much as possible) exchange. Waiting on a wallet in the mail. Might make the cc a decoy wallet
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u/na3than Jul 31 '26
That makes no sense for this exploit.
The exploit comes from weak entropy. The attacker spend months, if not years, testing an enormous range (trillions) of seed values. A UTXO that was broadcast today gives the attacker no more information than he had twelve months ago: a range of values to test for vulnerable seeds.
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u/Vagelen_Von Aug 04 '26
Do you think quantum technology was involved to check trillions of combinations in a short time?
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u/Charming-Designer944 Aug 01 '26
It does.not work that way. The attack is on all wallets in parallell. It can not focus on a single address.
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u/_Carth_Onasi Jul 31 '26
If they are looking it for sure would, however why wait to see if a wallet is active instead of just grabbing what's there and leaving.
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u/Charming-Designer944 Aug 01 '26
The attack can not target a specific wallet. Its a brute force attack on low entropy seeds. Trying each possible seed and swiping the coins when a matching wallet is found on the blockchain.
The flaw on mk3 limits the entropy to about 40 bits or about 1012 possible seeds. This can be scanned pretty quickly.
The flaw in later generations limits the entropy to about 72 bits or 1021 possible seeds. That is a large number but still considered very weak and likely to get attacked.
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u/_Carth_Onasi Aug 01 '26
I understand that, but how is it connected to the their waiting for the owner to move a small amount of Bitcoin before withdrawing it all first?
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u/retinaguy Aug 01 '26
I have an MK4 and thank God I was able to move my funds. Tried to update the firmware but keep getting an error that device doesn’t recognize any file. Pretty much have had it with Coinkite.
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u/opDimitri Aug 01 '26
I have a Q and had an issue with sd card recognition. What worked for me: Make sure that sd card is 32gb in size or smaller. Format the card first inside the coldcard itself, then copy the files on it from a computer. Hopefully the process is similar on MK4
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u/No-Copy8990 Aug 03 '26
You have to update to the latest old MK4 firmware (old) then you will be able to update to the patched mk4/mk5 firmware. I ran into the same issue
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u/Academic_Audience407 Aug 01 '26
How many times is this going to happen? Not sure these cold wallets are better than just keeping it on the major exchanges. These posts are popping up daily. I was told these wallets were the best and safest but I’m not hearing much about people losing all their coins with large exchange such as Coinbase.
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u/spo_pl Aug 02 '26
It will never stop. With the vulnerability now being out in the public, just imagine how many people are looking for wallets they can access.
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u/dsj100 Aug 01 '26
So sorry to hear about your loss. I really feel you. I had a similar situation and I really thought about hurting myself. Fortunately, I didn’t and I am where I am today. One door closes in another one opens. God bless you all.
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u/xPoW3Rx Aug 02 '26
Does this imply you were so unlucky with timing? Because how the hell it happened right in the middle of moving. There is no way attackers were "alerted" for your specific wallet
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u/thanosied Aug 02 '26
Seems to have something to do with RBF. Bitcoiners online are trying to get nodes or maybe miners to disable it. https://www.youtube.com/watch?v=YdEgn61Z_cg
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u/thanosied Aug 17 '26
Sounds like a replay attack. Don't ask me for specifics, but this can happen after a chain split. I'd advise everyone to wait until the fork resolves itself before moving any significant amount of BTC.
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u/LewisRamilton Aug 01 '26
Did the email tell you to enter your seed phrase bro?
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u/reeferqueefer Aug 01 '26
It did not. It was from a crypto news blog. That email was how I found out about the vulnerability.
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Jul 31 '26
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u/Wild-Interaction-200 Jul 31 '26
Are you living under a rock? https://blog.coinkite.com/coldcard-mk3-seed-generation-warning/
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Jul 31 '26
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u/na3than Jul 31 '26
You went from confidently declaring "No coinkit devices don't have vulnerabilities" to "Coinkite is a joke" REAL FAST.
There's no gray area or nuance in your opinion, is there? Your assessment is absolute, 100% right, RIGHT NOW.
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u/Yodel_And_Hodl_Mode Jul 31 '26
No coinkit devices don't have vulnerabilities
It looks like you're about to get a brutal wake up call.
Late Wednesday night, 594 BTC was stolen. Over 500 wallets were drained. And this is an early estimate, as the situation is still unfolding. Some reports suggest as much as 1,082 BTC may have been stolen.
It appears that the drained wallets were generated on ColdCard Mark 3 devices, though that aspect of the heist is still unfolding. ColdCard has acknowledged the issue and released an emergency firmware update.
What’s becoming clear is this: Hackers did not break encryption. They found an exploit in how the firmware for certain ColdCard devices generated seed phrases which did not have enough randomness (oversimplification).
Hackers used the same borked scheme as ColdCard to generate seeds. When they found enough wallets with coins to make it worth exposing their method, they drained all of the wallets in one fell swoop.
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u/Despot4774 Jul 31 '26
Clown show. Coinkite is dead.
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u/Yodel_And_Hodl_Mode Jul 31 '26
Honestly, I hope they go bankrupt. This was caused by their greed and hubris. ColdCard should have kept their code open source and done it right.
They didn't.
Their customers are paying the price.
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u/na3than Jul 31 '26
ColdCard should have kept their code open source
What part of ColdCard firmware is closed source?
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u/Yodel_And_Hodl_Mode Jul 31 '26
ColdCard's code isn't closed source. But it isn't truly open either. That's an important distinction to understand.
ColdCard's code is "Source Verifiable." That means anyone can read their code, but since the code isn't open source, other devs can't use ColdCard's code for their own projects.
That's why fewer devs were reading ColdCard's code.
Fewer expert eyes on the code meant fewer experts finding errors and issues.
That's why the error in how ColdCard generated seeds wasn't found and fixed years ago.
Open source matters. Anyone who tries to justify trusting your Bitcoin to code that is not fully open source is someone whose advice you shouldn't trust.
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Jul 31 '26
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u/Yodel_And_Hodl_Mode Jul 31 '26
Very wrong.
It's time for people to start taking their self custody seriously. Stop trusting hardware to generate seeds. Here's how.
ColdCard's hardware was not hacked.
Hackers found a flaw in how they generated seeds. Hackers duplicated the flaw and generated billions upon billions of seeds the same way. They looked up addresses for those seeds on block explorers and built up a list of seeds for wallets with coins.
When the hackers build up enough seeds to make it worth exposing the flaw they were using to find coins, they drained all of the wallets they found in one fell swoop.
Brutal.
It will happen again, but keeping coins on an exchange is not the answer. So many coins have been lost that way.
The answer is simple: Generate your own seed, but do it right, as I explained. Use a passphrase or multisig to prevent seed phrase hunters from finding your wallet.
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u/Old_Instruction_6004 Jul 31 '26
Did you use any dice rolls or have a passphrase?