Coldcard Exploit Drains 594 BTC, Analyst Says Crypto Reputation Suffers

Benjamin Cowen, a Bitcoin analyst with a long track record, took aim at the broader crypto industry after a hardware wallet exploit drained roughly 594 BTC from hundreds of users. The funds, worth about $50 million at current prices, were stolen from Coldcard wallets, a brand long considered one of the safest self-custody options.

Cowen wrote on X that the incident was "devastating to see so many people lose so much Bitcoin while doing what they believed was the right thing." He then tied the exploit to a wider problem: "People wonder why retail participation has been fading for years, yet the space continues to be dominated by scam..."

The attack targeted a vulnerability in Coldcard's seed generation process. Certain firmware versions could create wallet seeds using predictable inputs instead of relying solely on hardware entropy, blockchain investigators said. That allowed attackers to reconstruct private keys and drain funds.

Many of the compromised wallets had sat untouched for years before being emptied in a short window. The stolen BTC was later consolidated into a single address, pointing to a coordinated operation rather than isolated thefts.