Update (1030ET): A third wave of thefts against Bitcoin wallets built on flawed Coldcard firmware ran through Saturday morning, lifting observed losses to roughly 1,367 BTC - close to $89 million - drained from 4,585 addresses since Thursday.
As Cyberkendra.com reports, the size is not the interesting part. The third wave is the first one designed to be hard to follow, and that shift tells self-custody holders more about what happens next than any dollar figure does.
Galaxy Research published the wave-three findings early Sunday. Between 12:23 UTC on July 31 and 06:42 UTC on August 1, across blocks 960,396 to 960,471, another 207.73 BTC left 1,912 addresses. That is roughly a tenth of a coin per victim.
Wave one, which opened at 01:10 UTC on July 30 and closed 41 minutes later, took 1,082.65 BTC from 1,195 addresses — nearly a full coin each.
Wave two, on July 31, collected just 76.16 BTC from 1,478 addresses.
Median losses tell the same story more bluntly: 0.270 BTC in wave one, 0.010 in wave two, 0.013 in wave three. The operator is now emptying wallets worth a few thousand dollars apiece and still finding enough of them to spend ten hours sweeping.
Waves one and two were easy to map because the attacker made them easy.
Both funneled coins through a handful of shared collector addresses into P2WPKH holding wallets (pay-to-witness-public-key-hash — plain single-key SegWit outputs, fully visible on chain).
Wave three abandoned that.
Each victim's coins went to their own destination, and the proceeds now sit in 293 separate P2WSH vaults (pay-to-witness-script-hash, a format that keeps its spending conditions hidden until the first time the coins move). The sweeper also batched an average of 6.37 victims per transaction, where wave one took exactly one at a time, and scanned only the default derivation path instead of testing several branches per seed. Even the fee constant changed — 30 sat/vB in wave one, 50 and 10 in wave two, roughly 200 then exactly 10 in wave three.
That is either the same crew rebuilding after being enumerated in public, or a second crew grinding the same broken key space on its own.
The falling average haul suggests the profitable end of the vulnerable key space is picked over. That is cold comfort. Wave three's median take of 0.013 BTC is the clearest evidence yet that no balance is now small enough to be beneath the scanner's notice — and the sweeping had not stopped three days in.
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As Decrypt.co detailed earlier, Binance founder Changpeng "CZ" Zhao is warning crypto owners not to place blind faith in hardware wallets, following an exploit that drained tens of millions of dollars in Bitcoin from Coldcard devices.
In a Saturday post on X, Zhao cautioned that even hardware wallets can carry bugs, and that older wallets with long histories are not immune.
“Nothing is 100%,” he posted.
He suggested holders consider spreading their funds across several wallets as one way to reduce exposure, while acknowledging the approach carries its own trade-offs and that no setup is entirely foolproof.
CZ closed with his familiar refrain urging users to stay informed and keep their funds safe: “Stay SAFU!”
His comments followed the discovery of a flaw in Coldcard devices made by manufacturer Coinkite.
As Decrypt reported, a build error caused seeds on affected units to be drawn from a software fallback rather than the device's hardware random-number generator, leaving the private keys far easier to guess than intended.
The problem traced back to firmware shipped in March 2021, and updating the firmware does not fix a seed already created on a compromised device.
The scope of the theft has grown considerably since the first estimates.
Early reporting pegged losses at roughly 594 BTC, or about $38 million, drained from around 500 wallets.
According to a report from Galaxy Research, which mapped the flow of funds based on a pattern identified by engineers at Jack Dorsey’s Block, the toll is now put at 1,196 addresses drained for about 1,082.65 BTC, or roughly $70.2 million, in a 41-minute window on July 30.
That is nearly double the initial figure.
Galaxy said every sweep paid an identical hardcoded fee and left no change output, a signature it described as consistent with an automated tool spending keys it already held rather than owners moving their own funds.
“The pattern tells us these were all the same attacker — it does not capture the attack itself, which looks the same as if a coin owner chose to move coins,” Galaxy Research said, adding that Bitcoiners should move funds out of single-signature Coldcard addresses and into secure custody.
The victims spanned native SegWit and older address types, pointing to multi-path key scanning.
The stolen Bitcoin was consolidated within minutes into a handful of addresses and, per Galaxy, has not moved since.
Coinkite co-founder Rodolfo Novak said in an X post on Friday that the company takes responsibility for the firmware bug and has shipped emergency hotfixes.
Novak also warned that the update does not protect seeds generated on vulnerable firmware.
He advised users who generated seeds on vulnerable firmware to move their funds to a new seed.