Yoroi Who? Rebranded Cardano Wallet Loses Keys to Its Own Code 🗝️

SecondFi, a Cardano-based self-custodial wallet that rebranded from Yoroi in April 2026, has traced a major exploit that drained user funds to a flaw in its own wallet-generation software, warning affected users not to restore their recovery phrases into any other Cardano wallet. The vulnerability, identified as a deterministic nonce derivation flaw in SecondFi's software signer, allowed attackers to mathematically reconstruct private keys from publicly available on-chain data after affected addresses signed transactions. SecondFi said the issue exists at the address level, meaning compromised keys remain exposed even if users import the same recovery phrase elsewhere, and that every transaction signed by an affected address leaked enough information for attackers to derive that address's private key.

The platform's internal estimate puts losses at around 16 million ADA, worth approximately $2.4 million at a price of $0.150237 per ADA as of June 24, when the token was down 3.00% over 24 hours. SlowMist founder Yu Xian, known by the handle Cos, placed total losses above $20 million, citing more than 129 million ADA and additional non-ADA tokens that may have moved through addresses linked to the attacker. SecondFi has since secured approximately 129 million ADA in emergency containment efforts, transferring the funds to an independent third-party custodian to be held for affected users pending verification. Roughly 4.02 million ADA linked to the exploit remains in one identified collection wallet, which has been flagged and is under active monitoring.

SecondFi disclosed that 374 wallet addresses were impacted across four separate wallet-draining events between June 21 and June 23. According to the investigation, one attacker drained 171 wallets across two waves while a second actor compromised 203 wallets during a separate sweep. The company has established a dedicated restoration fund to reimburse affected users and engaged multiple external security firms to audit its systems before resuming normal operations. The platform remains in maintenance mode while independent security reviews continue.

Cardano founder Charles Hoskinson said SecondFi is not an Input Output Global product and stressed there is no ownership, control, or business relationship between the wallet and IOG. In a Tuesday video posted on X, Hoskinson said IOG "is not Emurgo," adding the company has no influence over Emurgo and cannot speak on its behalf regarding the exploit, and stated plainly, "We didn't write the code and we're not connected to it." IOG's incident response team has been in contact with SecondFi since Monday, and the platform has requested an independent security audit.

Mitchell Amador, CEO of Immunefi, told Cointelegraph that "SecondFi's wallet software exposed the private keys it generated," noting that while the blockchain remained secure, the code that generates the keys is the "part nobody audits like a contract." Amador added that attackers have increasingly shifted focus toward infrastructure that creates or stores crypto keys rather than blockchain protocols. SecondFi advised affected users not to migrate their recovery phrases, withdraw staking rewards, or attempt to move funds independently, warning that such transactions could expose funds to attackers monitoring the mempool, and instead to wait for its official recovery process while submitting claims through its support portal.