Coldcard Mk3 Seed Flaw Exposes Keys, Linked to 594 BTC Theft

Woofun AI reports that Coinkite has issued a critical security warning for Coldcard Mk3 devices, citing a seed-generation vulnerability that necessitates immediate fund transfers to prevent key exposure.

The technical scope of the flaw encompasses firmware versions 4.0.1 through 5.0.3, where the random number generation process during wallet creation suffers from insufficient entropy. This deficiency renders the resulting seed phrases theoretically predictable, thereby compromising the cryptographic integrity of any wallet initialized on affected hardware.

Woofun AI data shows an ongoing investigation into the theft of 594 BTC, valued at over $20 million, from hundreds of single-signature wallets. The scale of this incident has prompted security researchers to scrutinize potential weaknesses in wallet generation processes, raising alarms across the industry.

While Coinkite has not confirmed a direct connection between the vulnerability and the theft, nor disclosed whether the flaw has been exploited in the wild, the timing suggests a plausible link. Security researchers are actively analyzing these potential weaknesses, treating the advisory as a precautionary measure against a confirmed threat vector.

Affected users are instructed to check their firmware version immediately and transfer funds to a new wallet created on updated hardware or firmware without delay. The mitigation strategy requires careful execution to avoid exposing private keys during the transition, emphasizing that speed and precision are paramount.

This incident underscores a broader concern in the cryptocurrency community regarding the fragility of secure random number generation in hardware wallets. It serves as a stark reminder that no device is infallible, and staying informed is key to protecting assets against evolving technical risks.