Digital Wallet

Story: Coldcard Security Breach Sparks Transfer of 39,600 Bitcoins to Central Exchanges

By Jean-Luc Maracon

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39,600 Bitcoins Move in Seven Days. The numbers are clear. Between July 28 and August 3, the total reserves of bitcoins on centralized…

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A Sudden Reversal of Post-FTX Habits. This is where it gets really interesting — and a bit ironic.

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Trust in Self-Custody Takes a Hit. This is the real long-term problem for the hardware wallet industry.

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A firmware flaw. Two thousand bitcoins stolen. Over a hundred million dollars gone.

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Since the end of July, Coldcard holders have been doing something not seen on this scale since the collapse of FTX in November 2022: they are massively moving their BTC back to…

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The numbers are clear. Between July 28 and August 3, the total reserves of bitcoins on centralized platforms increased from 2.701 million to 2.719 million BTC.

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To give an idea of the scale, it's almost identical to the 39,900 bitcoins transferred during the FTX crash. Almost to the tenth. It's unsettling.

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Binance captured a significant share of these flows. Its BTC reserves increased from 650,000 to 659,000 bitcoins over the same period — a rise of 9,000 BTC in just a few days,…

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After FTX, the dominant movement in the crypto market was exactly the opposite: fleeing centralized platforms, taking control of one's private keys, "not your keys, not your coins.

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And then, in just a few days, a technical incident calls all that into question.

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Related topic: A 40-bit entropy flaw exposes Coldcard to a $100 million hack

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Holders of small amounts of bitcoins reacted particularly quickly. This behavior — small holders moving first — is exactly what was observed during the FTX crisis.

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Read also: Coldcard Firmware Bug Drains $116M as Bitcoin Holds Near $64,000

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What is less clear is the intention behind these transfers. Some of these 39,600 bitcoins likely went to new wallets rather than exchanges.

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No details either on how many Coldcard users are actually affected by the firmware flaw. The 2,000 bitcoins stolen — over $100 million — represent the confirmed losses, but the…

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