Five-Year-Old Coldcard Bug Drains $100M in BTC — Self-Custody Crowd Says "Hold My Multisig

A firmware vulnerability uncovered last week in Coinkite's Coldcard hardware wallets enabled attackers to drain approximately 1,600 BTC, valued at over $100 million, from around 7,300 addresses, according to Galaxy Research. The flaw originated in a March 2021 firmware update and had remained undetected for five years before three waves of attack rolled through on Thursday. The Toronto-based manufacturer has since patched every affected device line.

Swan Bitcoin CEO Cory Klippsten, who was in Paris attending a wedding when the news broke, described coordinating an emergency response in which he was "sending messages at 4 a.m. to help someone on Pacific Time get their coins to safety." The U.S.-based platform, which helps individuals buy, hold and self-custody bitcoin, paused withdrawals for at-risk clients, shipped in-app warnings and opened its migration support beyond its existing user base. "Our team dropped everything to start calling clients, and then we opened it up to anyone who needed help, whether they had ever been a Swan client or not," Klippsten said in an interview.

A week on, roughly 90% of the stolen coins remain unmoved onchain, and confirmed attacker addresses have been shared with U.S. federal law enforcement. A volunteer team funded by OpenSats scanned more than 150 open-source repositories and found no evidence the problem extended beyond Coldcard. The incident has nonetheless prompted some industry voices to question the value of self-custody, with suggestions that investors consider holding bitcoin through exchange-traded funds instead.

Klippsten said clients are not retreating from self-custody but are migrating to setups that make their bitcoin harder to access. "People are moving into Swan Vault right now," he said, referring to the firm's collaborative multisig product, where no single compromised device can put funds at risk. The shift reflects a broader move across the community toward vault architectures designed to withstand the failure of any one piece of hardware.