Galaxy Research expanded the estimated damage from the Coldcard wallet compromise to $70 million after analyzing on-chain data. The firm identified 1,196 addresses that collectively lost 1,082.65 Bitcoin during a 41-minute window, substantially higher than initial assessments of the breach.
The Coldcard incident represents one of the largest hardware wallet compromises in recent memory. Coldcard, a Bitcoin-only hardware wallet manufactured by Coinkite, suffered a vulnerability that allowed attackers to drain funds from compromised devices. The breach exposed the wallet's supply chain or firmware to exploitation, enabling thieves to access private keys or bypass security protocols.
Galaxy's analysis tracks the stolen Bitcoin across multiple addresses, revealing a coordinated attack pattern. The rapid 41-minute window suggests attackers either had pre-identified targets or executed an automated sweep across known vulnerable Coldcard holders. The 1,082.65 BTC loss at current prices reflects substantial real losses for affected users.
This incident highlights hardware wallet risks despite their reputation for superior security compared to hot wallets. Supply chain vulnerabilities, firmware exploits, and manufacturing flaws can compromise devices before they reach users. Coldcard's response and remediation efforts remain central to restoring trust in the platform.
The breach raised concerns across the hardware wallet ecosystem. Competitors like Ledger, Trezor, and others faced renewed scrutiny regarding their security practices and supply chain integrity. Users with Coldcard devices began exploring migration strategies to alternative wallets or re-securing their holdings.
Bitcoin community members criticized Coldcard's initial disclosure timeline and transparency regarding the vulnerability's scope. The $70 million loss estimate from Galaxy represents real financial damage to retail and institutional Bitcoin holders relying on Coldcard for custody. The incident underscores the importance of firmware updates, security audits, and rapid response protocols in hardware wallet operations.