On July 30, 2026, an attacker began systematically draining Bitcoin from Coldcard hardware wallets, exploiting a firmware entropy bug that had been sitting in the code for years. The first wave of the attack moved 1,082.65 BTC, which still sits untouched in the attacker's address, and confirmed losses have now passed $118 million across more than 5,000 addresses.
The attack in waves
The initial wave was surgical. On-chain analysts, including Alex Thorn at Galaxy Research, tracked the activity through pattern analysis and voluntary victim reports. Thorn said law enforcement may already know the identity of the Wave 1 attacker.
Later waves look different. Smaller, faster, and with distinct operational patterns, they suggest other actors reverse-engineered the weak seed space after the vulnerability became public. Self-reported confirmed drains slowed sharply after August 6, but that doesn't mean the threat is gone. Many potentially vulnerable seeds generated on the affected firmware remain at risk.
Clues from the investigation
Clay Garrett, engineering lead at Block (Bitkey), reported that the attacker used a paid account at a blockchain-services provider. Internal logs matched the theft pattern with 'extraordinary specificity,' Garrett said, and the information was shared with authorities. That detail narrows the field — whoever pulled this off left a digital trail that points to a real-world identity.
Still, the full scope is murky. Confirmed and estimated losses exceed 1,800 BTC from more than 5,000 addresses, with total estimated losses over 2,000 BTC. The gap between confirmed and estimated is a reminder that many victims haven't come forward yet.
A bug Coinkite knew about
This isn't a novel attack vector. Back in October 2021, Coinkite discussed a 'retirement attack' — a scenario where project makers could plant a bug in entropy generation for later retrieval. That description matches the 2026 vulnerability almost exactly. The company talked about the risk publicly, but the bug still made it into firmware and stayed there for years.
Who's behind it?
Some in the Bitcoin space suspect an inside job at Coinkite. The evidence so far is circumstantial — no definitive link has been established. But the combination of a long-standing entropy flaw, the attacker's apparent access to paid blockchain services, and the precise targeting of Coldcard devices keeps that question open.
The next concrete step is likely forensic: whether law enforcement acts on the identity clues Thorn and Garrett pointed to, and whether Coinkite ships a firmware update that forces users to rotate seeds. Until then, anyone holding Bitcoin on a Coldcard generated with older firmware has a decision to make.
