Coinkite COLDCARD Mk4

COLDCARD: a preprocessor guard that tested whether a macro was defined rather than what it was set to routed key generation to a software PRNG for five years, and the keys are now being emptied

This is out of the constituency's usual nexus (a consumer Bitcoin hardware wallet, not public-sector or critical-infrastructure equipment) and is carried on two grounds: the confirmed scale of exploitation now under way (a running estimate of 1,367.05 BTC across 4,585 addresses over three waves), and a root cause that is an embedded-firmware assurance anti-pattern applying to any device whose cryptographic quality depends on a build-time switch.

In 2021 Coinkite moved COLDCARD's elliptic-curve operations onto Bitcoin Core's libsecp256k1, which required adding an embedded MicroPython library, and during that migration wallet-seed generation moved from the vendor's own ckcc.rng_bytes() to ngu.random.bytes(). That path resolved rng_get() to MicroPython's software fallback rather than COLDCARD's hardware RNG implementation (Coinkite, 2026-07-30). The reason nothing broke is the part worth reading twice: "The guard used #ifndef, which tests whether MICROPY_HW_ENABLE_RNG is defined, rather than whether its value is nonzero. We defined that macro as zero, so the #error did not stop the build.", and because the fallback provided a function with the same signature as the intended implementation, "the build completed without identifying the wrong implementation" (Coinkite, 2026-07-30). The vendor's own summary of why review missed it is the generalisable finding: "Existing review confirmed that the intended TRNG implementation was present in the firmware binary, but did not verify which rng_get() implementation the wallet seed-generation path actually reached across the two submodules." (Coinkite, 2026-07-30).

The consequence is a reduced key search space rather than a leaked key. On Mk2 and Mk3 the active PRNG was seeded primarily from device and timing state, and Coinkite estimates the effective search space at about 40 bits; Mk4, Mk5 and Q mixed in entropy from two secure elements as a backup, which it estimates leaves about 72 bits. The vendor labels both as preliminary estimates under current attack assumptions that may change as analysis continues, and states plainly that for funded wallets without either at least 50 independent private dice rolls or a strong unique passphrase, "the reduced search space is a direct security risk, not a theoretical possibility" (Coinkite, 2026-07-30). Block Engineering reached the same defect independently, framing it as a predictable RNG fallback compounded by a 32-bit reseed (Block Engineering, 2026-07-30). The affected Mk2/Mk3 firmware range is 4.0.1 through 4.1.9, corrected in 4.2.0; the other fixed builds are 5.6.0 for Mk4 and Mk5, 1.5.0Q for Q, and Edge releases 6.6.0X and 6.6.0QX. Updating does not repair a seed generated by affected firmware; those seeds must be replaced and funds migrated (Coinkite, 2026-07-30).

Exploitation is live and escalating. Galaxy Research reported a third wave on 2026-08-01 in which a further 207.7294 BTC was drained, putting its estimate of the total at 1,367.05 BTC across 4,585 addresses; it assesses waves 1 and 2 as likely one operator on shared collector addresses and identical destination-address types roughly 27 hours apart, while wave 3 used per-victim destination addresses, a different output type, batched victims and only the default derivation path; differences Galaxy says could mean either new evasion tradecraft from the same actor or a second actor exploiting the same flaw. All the attacker-controlled funds remain unspent, which Galaxy calls unusual for a theft of this size, and every compromised address was created after the vulnerable firmware shipped in March 2021 (CryptoTimes, 2026-08-01).

The discovery route is the vendor's assumption, not an established fact, and it cuts in two directions at once. Coinkite writes that because its source has always been public, "we have to assume that someone used AI to review previous versions of our firmware and stumbled upon this issue", and in the same paragraph that "A few weeks ago, we used one of the best available AI models to review our code for security issues, and it did not find this bug or anything serious.", concluding that "Both attackers and defenders have the same AI tools, but today it did not help us, and only helped the bad guys." (Coinkite, 2026-07-30). No source establishes how the flaw was actually found.