Alex Thorn, Galaxy Digital's head of firmwide research, said the Coldcard exploit had struck some of Bitcoin's most committed users and challenged the belief that uncompromising self-custody offered the safest way to hold the asset.
- In an Aug. 14 report, Thorn said the era of "Bitcoin maximalist purity" was likely to end following the theft.
- He used the term to describe a culture that criticized investors who relied on custodians, used hardware wallets supporting assets other than Bitcoin or followed prominent personalities without independently examining the underlying software.
Galaxy Digital has confirmed with high confidence that attackers stole over 1,778 BTC, worth roughly $113 million at the time of its report, from more than 8,600 addresses. The firm reached its estimate after speaking directly with 190 victims.
Including those transactions and a suspected fourth attack wave would raise the possible total to 2,417 BTC, or about $153 million, according to Galaxy Digital.
Thorn blames Coinkite's code and culture
Thorn placed responsibility on Coinkite, the Canadian company behind Coldcard, rather than on customers who followed the security practices promoted by the Bitcoin community.
As Thorn wrote, "no one is to blame for this incident other than Coinkite" and described the underlying work as "shoddy code."
Alex Thorn
- Coinkite argues its firmware source has been publicly available throughout Coldcard's development.
- The company has also published a repository of previous security reviews and disclosures, though its security status page says the fixed firmware hasn't undergone a complete independent audit and that a formal postmortem remains in progress.
A build and linking error connected wallet seed generation to a general-purpose software random-number generator instead of the hardware source intended to supply secure randomness.
Coinkite's technical account also says there was "no intentional weak-entropy fallback." The company estimated that affected older devices produced seeds with about 40 bits of effective security, while later models produced roughly 72 bits, below the expected 128 bits.
The weaker seeds allowed attackers to search through possible combinations and reconstruct private keys without obtaining the physical devices or stealing users' recovery phrases.
Multi-sig providers report a surge
Galaxy Digital says none of the theft transactions it confirmed took funds from a multisignature wallet, which requires more than one key to authorize a transfer.
- Casa, a collaborative custody provider, reported "massive inbound" after the exploit emerged.
- Anchorwatch also recorded its largest week of inflows since its founding, while Unchained reported increased interest from long-term holders.
Dhruv Bansal, an Unchained co-founder, said the central risk was a "single point of failure," whether it came from a custodian, wallet manufacturer or individual user.
- Galaxy Digital also said it had identified at least 33 smaller attacker footprints in addition to three principal attack waves.
- It couldn't determine which footprints belonged to the same actors, but said it had high confidence that multiple attackers exploited the vulnerability.
No confirmed high-confidence theft activity has been identified after Aug. 6. According to the New York-based crypto firm, the apparent slowdown may reflect users moving their funds or attackers exhausting the most accessible wallets, rather than the threat disappearing.
About 1,531 BTC (or 86% of the confirmed stolen amount) remains unmoved in attacker-controlled addresses. Roughly 246 BTC has moved since the thefts, with 65% entering CoinJoin transactions and the remainder moving through other addresses, exchanges or cross-chain bridges.