594 BTC is gone, drained through a flaw that was hiding inside one of Bitcoin's most trusted hardware wallets the entire time.
An entropy bug inside Coldcard devices allowed attackers to brute-force private keys and empty wallets holding a combined $38 million in Bitcoin. And the developer sounding the loudest alarm is Peter Todd, one of Bitcoin's earliest contributors and a persistent candidate in the Satoshi Nakamoto conversation.
Todd's message is not subtle: no Bitcoin stored in a singlesig wallet can be considered truly safe.
What Actually Happened
Entropy is the randomness that makes your private key impossible to guess. If a hardware wallet generates weak entropy during key creation, that randomness shrinks. A sufficiently motivated attacker can brute-force the shrunken keyspace and reconstruct your private key without ever touching your device.
That is exactly what happened here. The affected Coldcard units produced keys with flawed entropy. Hackers identified wallets generated during the vulnerable window, brute-forced the keys, and drained them. Victims saw their funds disappear with no warning and no exploit of their personal setup. Their only mistake was trusting the device to do the one job it was built for.
Why Todd's Warning Is Bigger Than This Hack
Todd is not just criticizing Coldcard. He is making a structural argument: singlesig storage, where one key controls one wallet, creates a single point of catastrophic failure. A hardware bug, a supply chain compromise, or a weak random number generator is all it takes. The wallet's reputation and price point are irrelevant.
The fix Todd and other security-focused developers have pushed for years is multisig, requiring multiple independent keys and devices to authorize any transaction. Under a multisig setup, one compromised device means one compromised key, not one compromised wallet.
Coldcard has acknowledged the entropy issue and released updated firmware. But firmware patches do not help wallets that were already generated under the vulnerable conditions. Those keys are already weak. Those funds are already exposed.
What Bitcoin Holders Need to Do Right Now
If you generated a Coldcard wallet before confirming your firmware is clean, treat that wallet as potentially compromised. Move funds to a freshly generated wallet on verified, updated hardware before doing anything else.
More broadly, anyone holding significant Bitcoin in a singlesig setup should treat this as a forcing function to evaluate multisig. Tools like Sparrow Wallet, Casa, and Unchained make multisig more accessible than it has ever been.
The $38 million loss is the headline. The real story is that hardware wallets are not vaults. They are trusted components in a system, and trust has a failure rate. Watch for further disclosures about the scope of affected devices. This may not be the final number.