Last week, hackers discovered a five-year-old bug in Coldcard software and used it to drain over 1,158 BTC worth over $72 million from over 2,600 addresses.
By Sunday, the tally rose to 1,359 BTC and continues to rise today.
A rudimentary dashboard is charting the rising number of thefts, with many security experts warning of additional waves of attacks.
The essence of the bug is that, despite claims by Coldcard’s manufacturer and documentation, many of its devices didn’t actually use a true random number generator (RNG) with sufficient entropy to protect users trusting the device to generate private keys and seed phrases.
Instead, the device used a fallback, a pseudo RNG, with far lower entropy.
Unfortunately, trivial amounts of computation can guess these low entropy seed phrases generated by Coldcard devices.
Once in possession of these private keys, a quick scan of the blockchain reveals associated public keys holding BTC, and hackers then steal those funds.
The bug has existed since March 2021, but security researchers only publicly discovered it last week. As theft transactions began, customers and members of the community began to track the horrifying timeline of events.
As brute-force attacks continue to crack private keys, here’s a summary of the series of events that led up to the ongoing catastrophe.
Read more: Crypto wallet seeds crackable with gaming PC via this security flaw
Timeline of the Coldcard hack
November 18, 2020, 19:19 UTC: There are disputed histories and allegations about Coldcard maker Coinkite’s motivation during this time to end its commitment to free and open source software (FOSS).
In any case, by late 2020, Coinkite announced its intention to restrict commercial use of its firmware (on-device software), and by early 2021, the company began migration to a new software license.
It would develop a proprietary library called “libNgU.”
March 1, 2021, 14:03 UTC: Coinkite commits code titled “First pass w/ libNgU,” its final step away from FOSS and moving Coldcard firmware (on-device sofware) onto its proprietary library, libNGU.
March 29, 2021, 19:27 UTC: Firmware 4.0.1 reaches owners as the first public build with the flaw. Coldcard devices shipping with or upgrading to this new firmware would begin generating insecure seed phrases.
The bug of pseudo RNG on versions 4.0.1 and later would persist on Coldcard software for over five years from March 29, 2021 through July 30, 2026.
July 30, 2026, 01:10 UTC: Bitcoin block 960,183 includes the first Coldcard hack transactions from a hacker.
July 30, 2026, 13:19 UTC: A user posts the first widely read account to Reddit, “Full panic — one of my wallets was drained.”
30 July 2026, 17:35 UTC: Kevin Loaec, a BTC security researcher, asks his followers to check their balances. “I’m hearing a potential issue with some Coldcard wallets being drained,” he wrote. “I will not FUD, but would like to get at least reports of trusted people.”
30 July 2026, 18:58 UTC: Less than 90 minutes later, Loaec drops the hedge. “Alright I’m convinced THIS IS NOT A DRILL.”
30 July 2026, 22:50 UTC: The official Coldcard social media account publishes a Mk3-only advisory that has since drawn more than two million views.
It would claim “Mk4, Q and Mk5 are not affected based on our early analysis,” which would later turn out to be false.
On its website, Coinkite formally discloses the vulnerability and quickly publishes a bug patch via firmware 4.2.0.
July 31, 2026, 01:49 UTC: A Block engineer circulates its independent analysis of the incident, which identifies the root cause.
“COLDCARD firmware contains an RNG integration error that causes ngu.random to use MicroPython’s deterministic Yasmarang fallback instead of the STM32 hardware RNG.”
July 31, 2026, 04:54 UTC: Block 960,345 inclues additional theft transactions, which would continue for another four hours.
July 31, 2026, 06:46 UTC: Coinkite posts a technical disclosure widening the scope to its Mk4, Mk5, and Q Coldcard devices.
July 31, 2026, 08:36 UTC: Block 960,369 carries another drain of funds alongside 250 others.
July 31, 2026, 13:19 UTC: Kevin Loaec, another security researcher, warns that more theft transactions are underway.
July 31, 2026, 13:43 UTC: Coinkite releases Mk3 firmware 4.2.0. It emphasizes that the update will fix new private key generations but cannot repair a past, compromised seed phrase.
July 31, 2026, 15:42 UTC: Coinkite co-founder and chief executive Rodolfo Novak apologizes in an open letter. “We take full accountability for the firmware bug and we offer our sincere apologies to those affected.”
July 31, 2026, 16:30 UTC: Bitcoin Core contributor Antoine Poinsot tells his followers the scope is wider than Coinkite initially admitted.
“Coldcard MK3, MK4, MK5 and Q are being drained. A bug lets attackers find your seed phrase without any action on your part.”
July 31, 2026, 16:39 UTC: Coinkite concedes that seed phrases from compromised firmware carry “about 72 bits of entropy rather than the expected 128 bits.”
July 31, 2026, 17:42 UTC: Block engineering lead Clay Garrett claims that an attacker queried source addresses through a paid account at a blockchain data provider, raising the possibility that customer records from the company might assist law enforcement.
“Their internal logs matched the suspected workflow with extraordinary specificity, including the number, timing and sequence of requests.”
July 31, 2026, 18:27 UTC: Chainalysis, a US government contractor and forensic blockchain service, said, “Our team is actively monitoring the exploiter wallet and a consolidation address.”
July 31, 2026, 23:17 UTC: A developer launches a vibe-coded webite as a free dashboard counting the drained BTC. The website is helpful yet incomplete.
August 1, 2026, 12:29 UTC: Security researcher Loaec confirms that hackers are draining newer models. “It’s happening. Mk4, Mk5, Q are now actively drained,” he notes while publishing a detailed incident analysis.
August 1, 2026 18:38 UTC: Galaxy Research estimates ongoing losses from the Coldcard hack exceed 1,367 BTC from 4,585 addresses.
Coldcard contained a true RNG generator that was never properly switched on, so its physical entropy didn’t actually matter for the majority of customers over five years.
Devices fell back to a pseudo RNG generator and produced seed phrases that merely appeared to be secure.
The largest consolidation address belonging to the hacker(s) holds 562 BTC and had not spent outputs. That’s the only good news due to the possibility of that inaction indicating a potential law enforcement apprehension of the perpetrator(s).
Many victims have filed police and FBI reports or similar law enforcement submissions around the globe.
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