BlockTower Capital's Ari Paul says the $70M Coldcard hack proves crypto can't be secured. ShapeShift's Erik Voorhees disagrees, pointing to billions stored safely for years.
Alpha Score of 38 reflects weak overall profile with weak momentum, weak value, poor quality, strong sentiment.
A firmware flaw in multiple Coldcard hardware wallet models let an attacker drain roughly 1,082.65 BTC – about $70.2 million at the time – in 41 minutes. The incident has reopened a fundamental argument inside crypto about whether any storage method can truly protect digital assets.
BlockTower Capital founder Ari Paul said the Coldcard compromise exposed an uncomfortable truth that has always existed. "The Coldcard compromise is being somewhat shrugged off, correctly, since it revealed nothing new," he wrote on X. "But what it reminded us of is that there is simply no way to secure crypto."
Paul argued that neither self-custody nor third-party custody offers a real escape from risk. "If you custody it with Coinbase or another custodian, they're frequently hacked, and you get no compensation. Custody it yourself, perfectly, and you may lose it to coldcard-like compromises," he said.
The attack hit Jonathan Goodman, an entrepreneur who said $1.6 million worth of Bitcoin was stolen from his Coldcard wallet. "My Bitcoin was in cold storage. My keys were on a ColdCard device kept in a safety deposit box that had never been connected to the internet," Goodman wrote on X.
Paul's argument extends beyond a single hardware manufacturer. Every custody solution, he said, depends on hardware and software that could carry undetected vulnerabilities. "The sad reality is that the legal system remains a far more reliable safeguard of financial assets than cryptography today in most of the developed world," he stated. He conceded that crypto may still offer a stronger alternative in countries where legal institutions and property rights are less dependable.
ShapeShift founder Erik Voorhees pushed back. The Coldcard incident does not prove cryptocurrencies cannot be secured, he said on X. He argued that every method of storing wealth involves different tradeoffs, not identical risks. Hundreds of billions of dollars worth of crypto have been stored securely for years, he noted.
The two founders agreed on one point: no single storage system is perfectly risk-free. The disagreement is about whether the tradeoffs are acceptable. The Coldcard hack did not introduce a new vulnerability class – it reminded the market that the gap between theoretical security and practical security can be measured in minutes.
Drafted by a large language model from the source reporting linked above, then screened by automated publishing checks. It is not read by a journalist before publication. Some articles cite our Alpha Score. Verify prices and figures against the original source. Educational coverage, not personalized advice.