Large-scale Coldcard compromise (1596 BTC stolen so far)

[joker_josue]

Also: With something like a ShieldSigner, the hardware is just a Raspberry Pi and a micro SD card. Flash a game onto the micro SD card when you travel and it's just hardware for a game. When you get where you're going, use your laptop to flash ShieldSigner onto the micro SD card and pop it into the device. Boom. It's a hardware wallet again. Nice!

In other words, you assemble the equipment the same way as with SeedSigner, but use ShieldSigner?

That's really interesting. I think I'll have to test it out.

Isn't asking "Do you really need" the wrong question? We're talking about Bitcoin security. For an everyday purchase, of course a hot wallet is fine. But what about all of the people who just got robbed because they trusted ColdCard?

I guess I was put off by the idea of bringing everything you own when you travel.

In reality, what you get is the key to the safe. 

For some time now I've been thinking about a very simple scenario:
Imagine that you leave your house, on a normal day, to go to work or to take a walk in the garden. But a neighbor forgot to turn off the gas. When you flip the switch to turn on the light, a spark occurs and an explosion happens.
Your home is severely damaged and all its contents destroyed. This includes your seed papers or hardware wallet.
Perhaps the metal plates with the seed are in the rubble. But when will you find them, will you be the first to find them or the firefighters/authorities?

Given this scenario, if you have a (properly encrypted) QR code in your pocket that allows you to open your main wallet, wouldn't that be advantageous?

[tvbcof]

...
I guess I was put off by the idea of bringing everything you own when you travel.

Depends on if you ever come 'back home'.

Indeed, some people, and even some fairly well off people, don't actually have a 'home' per-se.  I think I recall one of the richest men on earth, J. Paul Getty, spending his most productive years living with his pet (a fax machine) in a hotel.

It also could be the case that you are away on vacation then you discover that a fair bit of value is suddenly in question due to poor entropy (or advances in quantum or whatever.)  You might have to sleep in an airport and sweat bullets for 36 hours hoping that brute-force attackers don't hit pay-dirt on your stash.  But that's so crazy that it isn't even worth worrying about I guess.

[LoyceV]

For some time now I've been thinking about a very simple scenario:
Imagine that you leave your house, on a normal day, to go to work or to take a walk in the garden. But a neighbor forgot to turn off the gas. When you flip the switch to turn on the light, a spark occurs and an explosion happens.
Your home is severely damaged and all its contents destroyed. This includes your seed papers or hardware wallet.
Perhaps the metal plates with the seed are in the rubble. But when will you find them, will you be the first to find them or the firefighters/authorities?

Apart from hating my neighbors for blowing up my house, and assuming it doesn't kill me, this isn't a scenario that worries me for my current Bitcoin setup.

[joker_josue]

Apart from hating my neighbors for blowing up my house, and assuming it doesn't kill me, this isn't a scenario that worries me for my current Bitcoin setup.

You need to give me some tips.
I'm currently in the process of organizing my portfolio setup, so any tips are welcome.

As for the neighbors... you would have the funds protected to sue them! 

[Meuserna]

It does scan, and just shows "testing".

It didn't scan. You saw a picture of the QR on imgur. I labelled it "testing". Try scanning the QR.

That's what I did. The label is read from the QR. Your other QR reads "Bet you can't!". So without understanding the encryption, it still reads something.

Those aren't labels on the QR. Those are pictures of the QR that I took with an iPhone so I could post them as examples. The actual QR is just the white square with dots. It's literally just a QR.

I labeled the pics "test" and "bet you can't" rather than just uploading the two QRs so you'd see which is which. In other words, the QRs aren't really titled anything. They're just QRs.

Also: With something like a ShieldSigner, the hardware is just a Raspberry Pi and a micro SD card. Flash a game onto the micro SD card when you travel and it's just hardware for a game. When you get where you're going, use your laptop to flash ShieldSigner onto the micro SD card and pop it into the device. Boom. It's a hardware wallet again. Nice!

In other words, you assemble the equipment the same way as with SeedSigner, but use ShieldSigner?

That's really interesting. I think I'll have to test it out.

Yup. ShieldSigner is SeedSigner with extra security features. Same hardware, but instead of flashing SeedSigner to a micro SD card, you flash ShieldSigner. You can also get a smartcard reader hat for the Raspberry Pi if you want to use a smartcard with ShieldSigner. SeedKeeper and Satochip are applets that work with ShieldSigner and smartcards. It's a slick setup and it all runs on a Raspberry Pi Zero.

Isn't asking "Do you really need" the wrong question? We're talking about Bitcoin security. For an everyday purchase, of course a hot wallet is fine. But what about all of the people who just got robbed because they trusted ColdCard?

I guess I was put off by the idea of bringing everything you own when you travel.

In reality, what you get is the key to the safe.  

One thing I found myself asking about my own safe is, how do I prove it's never been opened when I'm not home? That became a problem to solve, and it wasn't hard.

I bought a simple home automation setup. It cost less than $75 for an Aqara hub and a few sensors. I have sensors on the safe that instantly notify me on my computer & phone if the safe has been opened or moved.

I've mentioned this elsewhere, but, I wrote a novel titled Five Dollar Wrench which is basically the story of a Bitcoin thief who robs people without hacking. I wrote the novel to help people stay safe by making them think about things people tend to overlook. I'm posting the novel for free, here.

[joker_josue]

Yup. ShieldSigner is SeedSigner with extra security features. Same hardware, but instead of flashing SeedSigner to a micro SD card, you flash ShieldSigner. You can also get a smartcard reader hat for the Raspberry Pi if you want to use a smartcard with ShieldSigner. SeedKeeper and Satochip are applets that work with ShieldSigner and smartcards. It's a slick setup and it all runs on a Raspberry Pi Zero.

Once I assemble the hardware, I'll test it. Thanks for the tips.

When I started studying SeedSigner, I was thinking about QR code security. Now, you've provided the solution.

[LoyceV]

You need to give me some tips.
I'm currently in the process of organizing my portfolio setup, so any tips are welcome.

My tips are just covering the basics: having multiple encrypted backups at multiple locations is enough to not worry about your neighbors blowing up your house.

Here's a real example
That's a 12 word seed. The first word of that seed is "damp" and the last word is "wear". I could leave that seed QR on this forum for fifty years and nobody could crack it.

Allow me to embed the image:

Those aren't labels on the QR. Those are pictures of the QR that I took with an iPhone so I could post them as examples. The actual QR is just the white square with dots. It's literally just a QR.
I labeled the pics "test" and "bet you can't" rather than just uploading the two QRs so you'd see which is which. In other words, the QRs aren't really titled anything. They're just QRs.

Then why does my phone's camera app show a note for the above QR? Try it: it looks like your iPhone did something.

[joker_josue]

My tips are just covering the basics: having multiple encrypted backups at multiple locations is enough to not worry about your neighbors blowing up your house.

But for that to happen, you need to have that possibility.
Either way, I understand the point. 

Then why does my phone's camera app show a note for the above QR? Try it: it looks like your iPhone did something.

Regarding the QR code, perhaps the program, when encrypting it, will allow you to add a message that will be displayed when someone scans the QR code.
I can't tell you yet, but when I receive the hardware, I'll be able to test it. 

If that's really the case, I can imagine the possibility of easily incorporating this "anywhere" (exaggerating) without raising suspicion.

[Cricktor]

Allow me to embed the image:

When I scan this QR code with my PFA (Privacy Friendly App) QR scanner on my mobile it decodes it as Text content, starting with

Bet you can't!
/ D/...

There's garbled text content after the "Bet you can't!", not shown in my quote to full extend, likely the encrypted text that needs to be deciphered.

Having encrypted QR codes with ShieldSigner or Krux is a good step forward for secure and convenient usage of stateless signing hardware. I also value the possibility to use DIY hardware that doesn't immediately scream hardware wallet, when purchased online. I will definitely have a closer look at ShieldSigner. The future of Krux might be a bit uncertain, since the main developer stepped away. I didn't quite follow if Krux will have someone else with some persistance to fill the project maintainer role and keep it alive.

What Meuserna avoided to mention clearly when he travels, is apparently the need to carry the encrypted SeedQR, maybe an encrypted QR for a complex mnemonic passphrase and very likely not the QR for the decryption secret, at least I wouldn't carry the latter with me in a machine readable version. You either have it with you in another obfuscated and hidden way or you memorized it temporarily.

[suzanne5223]

COLDCARD wave 3 attackers have, for the first time, transferred the stolen Bitcoins and exchanged the BTC for ETH via the THORchain cross-chain DEX. This marks the movement of the Coldcard hackers, as the stolen BTC has been transferred onchain from the original hacker address during Waves 1, 2, or 3.
https://x.com/intangiblecoins/status/2095297452681158840

[OmegaStarScream]

COLDCARD wave 3 attackers have, for the first time, transferred the stolen Bitcoins and exchanged the BTC for ETH via the THORchain cross-chain DEX. This marks the movement of the Coldcard hackers, as the stolen BTC has been transferred onchain from the original hacker address during Waves 1, 2, or 3.
https://x.com/intangiblecoins/status/2095297452681158840

https://x.com/intangiblecoins/status/2095300014507442680

the hacker appears to be having some issues swapping all the funds through THORChain — they keep getting refunded and he keeps retrying'

Interesting. Does anyone know if Thorchain has implemented any kind of mechanism to block and refund suspicious transactions recently? I have not seen any mention of that anywhere, but that's the first thing that comes to mind after reading the above statement.

[greysonz]

Coldcard new X post after two weeks of silence. Post about seed generation bug fix:

How does COLDCARD seed generation works post bug fix?

MK4 / MK5 ≥ 5.6.1 and Q ≥ 1.5.1Q

The multi-layered scheme shows that ColdCard does not trust any element of randomness individually, making up a seed phrase from a set of random "puzzles": three sources of randomness (due to separate chips) + randomness of the human factor: microintervals of mash keys and "dice rolls".

But comments:

[fillippone]

COLDCARD wave 3 attackers have, for the first time, transferred the stolen Bitcoins and exchanged the BTC for ETH via the THORchain cross-chain DEX. This marks the movement of the Coldcard hackers, as the stolen BTC has been transferred onchain from the original hacker address during Waves 1, 2, or 3.
https://x.com/intangiblecoins/status/2095297452681158840

https://x.com/intangiblecoins/status/2095300014507442680

the hacker appears to be having some issues swapping all the funds through THORChain — they keep getting refunded and he keeps retrying'

Interesting. Does anyone know if Thorchain has implemented any kind of mechanism to block and refund suspicious transactions recently? I have not seen any mention of that anywhere, but that's the first thing that comes to mind after reading the above statement.

Maybe it's because too much liquidity imbalance can disrupt "orderly" market formation in such thin markets. Hopefully, this is the reason, because if you are right, stating they implemented some "suspicious transaction" screening, then this means a blockchain can be forced to censor transactions at will. Which is bad.

[suzanne5223]

COLDCARD wave 3 attackers have, for the first time, transferred the stolen Bitcoins and exchanged the BTC for ETH via the THORchain cross-chain DEX. This marks the movement of the Coldcard hackers, as the stolen BTC has been transferred onchain from the original hacker address during Waves 1, 2, or 3.
https://x.com/intangiblecoins/status/2095297452681158840

https://x.com/intangiblecoins/status/2095300014507442680

the hacker appears to be having some issues swapping all the funds through THORChain — they keep getting refunded and he keeps retrying'

Interesting. Does anyone know if Thorchain has implemented any kind of mechanism to block and refund suspicious transactions recently? I have not seen any mention of that anywhere, but that's the first thing that comes to mind after reading the above statement.

Maybe it's because too much liquidity imbalance can disrupt "orderly" market formation in such thin markets. Hopefully, this is the reason, because if you are right, stating they implemented some "suspicious transaction" screening, then this means a blockchain can be forced to censor transactions at will. Which is bad.

I believe that could be the reason, or a technical failure of the swaps, since Thorchain claimed to prioritize censorship resistance.
While the swap attempts were getting refunded due to the platform's standard technical refunds for failed swaps, the DEX adding a mechanism to block or refund transactions flag for illicit or suspicious activity stated another thing the platform stands for.

[RGBTC]

Hopefully, this is the reason, because if you are right, stating they implemented some "suspicious transaction" screening, then this means a blockchain can be forced to censor transactions at will. Which is bad.

Considering the Bybit vs. Lazarus Group case in the past, this is their stance.

Unlike some other blockchain services, THORChain's operators have refused to block transactions linked to the Bybit heist, despite requests from the FBI and other government agencies.

https://www.coindesk.com/tech/2025/04/07/the-blockchain-fueling-north-korea-s-massive-crypto-laundering-operation
I think they will stick to their guns this time. You can still count on their censorship resistance.

Authorities occasionally need to play the "villain" themselves to censor them at the protocol level, because legal pressure means nothing. hahaa

[fillippone]

Hopefully, this is the reason, because if you are right, stating they implemented some "suspicious transaction" screening, then this means a blockchain can be forced to censor transactions at will. Which is bad.

Considering the Bybit vs. Lazarus Group case in the past, this is their stance.

Unlike some other blockchain services, THORChain's operators have refused to block transactions linked to the Bybit heist, despite requests from the FBI and other government agencies.

https://www.coindesk.com/tech/2025/04/07/the-blockchain-fueling-north-korea-s-massive-crypto-laundering-operation
I think they will stick to their guns this time. You can still count on their censorship resistance.

Authorities occasionally need to play the "villain" themselves to censor them at the protocol level, because legal pressure means nothing. hahaa

Also, there is an ethical point.
Bybit heist came to the disadvantage of people holding their coins on an exchange. A frowned upon practice.
Coldcard hack came to the damage of people doing self custody.

Something that is very different and could shift the balance here.

[ultrloa]

Hopefully, this is the reason, because if you are right, stating they implemented some "suspicious transaction" screening, then this means a blockchain can be forced to censor transactions at will. Which is bad.

Considering the Bybit vs. Lazarus Group case in the past, this is their stance.

Unlike some other blockchain services, THORChain's operators have refused to block transactions linked to the Bybit heist, despite requests from the FBI and other government agencies.

https://www.coindesk.com/tech/2025/04/07/the-blockchain-fueling-north-korea-s-massive-crypto-laundering-operation
I think they will stick to their guns this time. You can still count on their censorship resistance.

Authorities occasionally need to play the "villain" themselves to censor them at the protocol level, because legal pressure means nothing. hahaa

Also, there is an ethical point.
Bybit heist came to the disadvantage of people holding their coins on an exchange. A frowned upon practice.
Coldcard hack came to the damage of people doing self custody.

Something that is very different and could shift the balance here.

I find that as great observation, but the ethical implication is not actually the same. The heist happened on Bybit is actually punish those people have balance left in their accounts, this situation indicates that people at risk in their custody.

The hack or exploit happened on Coldcard actually hit those people, think that they are doing the right thing. None of those people expect that since what they think they are already using a self custody wallet. This is why the hacking situation is much heavier.

That situation creates massive big noises and many people question how safe the other self custody wallets, this reason why there are few people choose to transfer their funds on ETF and other things.

Sentiments seems shift and their are arguments floats that if they are using self custody wallets, they must be vigilant and always verify the tools they are using.

[greysonz]

Hopefully, this is the reason, because if you are right, stating they implemented some "suspicious transaction" screening, then this means a blockchain can be forced to censor transactions at will. Which is bad.

Considering the Bybit vs. Lazarus Group case in the past, this is their stance.

Unlike some other blockchain services, THORChain's operators have refused to block transactions linked to the Bybit heist, despite requests from the FBI and other government agencies.

https://www.coindesk.com/tech/2025/04/07/the-blockchain-fueling-north-korea-s-massive-crypto-laundering-operation
I think they will stick to their guns this time. You can still count on their censorship resistance.

Authorities occasionally need to play the "villain" themselves to censor them at the protocol level, because legal pressure means nothing. hahaa

Also, there is an ethical point.
Bybit heist came to the disadvantage of people holding their coins on an exchange. A frowned upon practice.
Coldcard hack came to the damage of people doing self custody.

Something that is very different and could shift the balance here.

I find that as great observation, but the ethical implication is not actually the same. The heist happened on Bybit is actually punish those people have balance left in their accounts, this situation indicates that people at risk in their custody.

The hack or exploit happened on Coldcard actually hit those people, think that they are doing the right thing. None of those people expect that since what they think they are already using a self custody wallet. This is why the hacking situation is much heavier.

That situation creates massive big noises and many people question how safe the other self custody wallets, this reason why there are few people choose to transfer their funds on ETF and other things.

Sentiments seems shift and their are arguments floats that if they are using self custody wallets, they must be vigilant and always verify the tools they are using.

The decision to buy bitcoins through an ETF, violating personal custody, is the stupidest thing an investor can do. BlackRock and similar companies will not compensate investors who trusted them if they are hacked. After all, if I understand correctly, insurance does not cover bitcoins, since they are a commodity, not a security. Lol.
Yes, we’ve encountered an incredible crisis of trust in ALL methods of storing Bitcoin:
Coldcard,
Ledger,
and now Trezor again.



But I believe that hardware wallets will learn from their mistakes. Perhaps they’ll use powerful AI for audits or something like that.

[Lucius]

~snip~
But I believe that hardware wallets will learn from their mistakes. Perhaps they’ll use powerful AI for audits or something like that.

I don't think they will learn anything, because in the end they can always shift the responsibility to someone else, as is the case now. Instead of taking care of customer data themselves, they leave it to others so they don't have to be responsible when something like this happens.

I have a Trezor too, but I don't have to worry about my data being leaked because I didn't use my personal information in the purchase process and I paid with BTC. Users will have to learn from their mistakes if they don't want to continue to be in databases that are regularly hacked.

[greysonz]

A new update has been released; they continue to improve security:

View TRNG Words is back. We also added an offline tool to verify dice-roll or coin-flip mixing, USB ncry v3, and more transaction, Virtual Disk, firmware and wallet-state fixes.

Full note:
https://blog.coinkite.com/coldcard-firmware-update-5.6.2-1.5.2q/

Btw, they closed the commenting feature for the post in X