The Frontier

A critical vulnerability in Coldcard hardware wallets (versions 4.0.1 and later, or any model after 4.0.0) compromises private keys due to a faulty random number generator.

The catastrophic Coldcard bug, introduced in March 2021, compromises seeds generated on any device after that date unless sufficient dice roll entropy (over 100 rolls) or a passphrase was used.

Hosts advise all Coldcard users to immediately move their funds off the devices and to cease using the product entirely, regardless of previous protective measures like passphrases or multisig.

The hosts express deep regret and take accountability for recommending Coldcard for seven years, admitting their past confidence was misplaced despite consistently advocating "don't trust, verify."

The Coldcard vulnerability was publicly disclosed on August 3, 2023, at Bitcoin block height 960885, prompting hosts to release this podcast immediately to maximize user notification efforts.

The hosts had previously conducted Coldcard workshops since December 2019 at Chaincode Labs with figures like Evan Kaludis and James O'Byrne, demonstrating features like dice rolls and passphrases.

Hosts concede to complacency, having placed too much trust in CoinKite's NVK and Peter; they now believe the concept of a "magic bullet" beginner-friendly solution for high-value self-custody is dead.

The bug, which existed for five years, appears to have been recently identified with assistance from AI, possibly through OpenAI's Cypher program utilized by Rob Hamilton's team for auditing Bitcoin projects.

The Bitcoin community has rallied to assist affected users, with Rob Hamilton (@Roboneham on X) publishing an extensive guide detailing Coldcard vulnerabilities, migration options, and recovery steps.

Attackers are actively brute-forcing compromised Coldcard seeds using GPUs, while authorities are investigating an attacker who reportedly pinged a centralized API provider to look up vulnerable addresses.

The hosts clarify the vulnerability is entirely CoinKite's responsibility, stating their firm 1031 is a minority investor (under 10%) with NVK and Peter maintaining majority ownership and control.

The hosts will now refrain from directly recommending specific custody solutions, instead laying out options and emphasizing multi-vendor multisig and robust passphrases as critical for long-term secure Bitcoin storage.

Users are strongly advised not to update Coldcard firmware, as new releases may brick devices; instead, the immediate priority should be transferring all funds off the compromised hardware.