Hackers Exploit Coldcard Hardware Wallet Flaw to Steal Over $130 Million

The crypto world was shaken this week after a critical vulnerability was uncovered in the Coldcard hardware wallet, an offline device marketed as one of the safest ways to store digital assets. Security researchers discovered a logic error in the wallet’s firmware that allowed malicious actors to bypass signature verification and initiate unauthorized transfers. According to several blockchain analytics firms, the exploit has been used to drain more than $130 million worth of cryptocurrencies from unsuspecting users.

Coldcard is designed to keep private keys completely isolated from the internet, signing transactions only when physically connected to a computer. The flaw, however, resides in a rarely‑used command sequence that, when crafted correctly, tricks the device into treating a fraudulent transaction as legitimate. Attackers reportedly deployed a custom script that repeatedly triggered the bug, targeting wallets that had been used multiple times without a firmware update.

The stolen funds span major tokens such as Bitcoin, Ethereum, and several stablecoins, with a sizable portion still traceable on public ledgers. Some exchanges have already frozen the illicitly moved assets, while others are cooperating with law‑enforcement agencies to identify the perpetrators.

Coldcard responded swiftly, releasing an emergency firmware patch that closes the loophole and urging all users to upgrade immediately. The company also recommended that owners review recent transaction histories for any signs of tampering. Security experts stress that the incident underscores the importance of regular updates, even for devices that operate offline, and advise users to adopt layered security practices such as multi‑factor authentication and hardware‑wallet diversification.

While the incident is a stark reminder that no system is impervious, it also highlights the responsibility of manufacturers to maintain transparent, rapid response processes. Crypto holders should stay vigilant, keep their devices up‑to‑date, and consider additional safeguards to protect their digital wealth.

Source: TechCrunch

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Hackers Exploit Coldcard Hardware Wallet Flaw to Steal Over $130 Million