Nature of the Vulnerability
Published 8/1/2026, 3:25:45 PM
A critical entropy vulnerability in Coldcard hardware wallets was publicly disclosed on July 31, 2026, following a coordinated attack that drained approximately 1,082 BTC (~$70.2 million) from over 1,100 addresses [Source: https://blog.coinkite.com/entropy-technical-backgrounder/]. The flaw allows attackers to brute-force wallet seeds because the randomness (entropy) used during seed generation was predictable due to a firmware configuration error.
Nature of the Vulnerability
The vulnerability stems from a code change introduced on March 1, 2021, which caused Coldcard devices to bypass their hardware True Random Number Generator (TRNG) and rely on a weak software fallback (Pseudo-Random Number Generator) [Source: https://blog.coinkite.com/coldcard-mk3-seed-generation-warning/]. This fallback was seeded with non-secret data, such as device serial numbers, making the resulting seeds mathematically guessable.
Impact by Model (Mk3, Mk4, Mk5)
The risk level is determined by the firmware version active at the time the seed was generated. Simply updating the firmware does not secure a seed that was created while the vulnerability was present.
| Model | Affected Firmware | Effective Entropy | Risk Level |
|---|---|---|---|
| Mk3 | 4.0.1 to 4.1.9 | ~40 bits | Critical: Actively exploited; can be brute-forced in minutes [Source: https://engineering.block.xyz/blog/predictable-rng-fallback-and-32-bit-reseed-in-coldcard-firmware]. |
| Mk4 / Mk5 | Pre-5.6.0 | ~72 bits | High: Harder to crack than Mk3 but remains below the 128-bit industry security standard. |
| Q | Pre-1.5.0Q | ~72 bits | High: Requires immediate migration to a new seed. |
Safe Exceptions:
- Dice Rolls: Wallets generated using 50+ manual dice rolls are safe, as they bypass the internal RNG [Source: https://blog.coinkite.com/coldcard-mk3-seed-generation-warning/].
- BIP-39 Passphrase: Using a strong passphrase (never entered on a computer) significantly lowers risk by adding entropy that attackers cannot pre-calculate.
- Legacy Models: Mk1 and Mk2 devices are not affected.
User Risks and Exposure
- Remote Theft: Attackers do not need physical access to the Coldcard. They pre-calculate millions of possible seeds and scan the blockchain for matching addresses.
- Targeted Assets: The July 2026 attack primarily targeted single-signature wallets [Note: not independently confirmed].
- Secondary Keys: Any BIP-85 child seeds or "Key Teleport" session keys generated on affected firmware are also considered compromised [Source: https://blog.coinkite.com/entropy-technical-backgrounder/].
Required Mitigations
To eliminate the risk, users must take the following steps:
- Update Firmware: Install v4.2.0 (Mk3), v5.6.0 (Mk4/Mk5), or v1.5.0Q (Q) to fix the RNG for future use [Source: https://coldcard.com/downloads].
- Generate a New Seed: You must create a completely new 12 or 24-word seed on the updated firmware.
- Migrate Funds: Transfer all assets from the old (vulnerable) wallet to the new (secure) wallet. Do not "restore" the old seed into the new firmware, as the seed itself is the point of failure.
- Temporary Protection: If immediate migration is impossible, adding a strong BIP-39 Passphrase to the existing seed and moving funds to that passphrase-protected account can provide an interim layer of security.
Note on Data Discrepancies: While the vulnerability is confirmed, the exact financial impact is contested. Reported stolen amounts range from ~500 BTC to 1,128 BTC depending on the source [Source: https://blog.coinkite.com/entropy-technical-backgrounder/]. Specific technical details like exact block ranges (960,183–960,191) have not been independently verified [Note: not independently confirmed].