38 million dollars drained in 15 minutes: 500 bitcoin wallets hit in coordinated heist
Around 594 bitcoin were siphoned from 500 wallets in minutes. The trail points to a random number generator failure in the Coldcard hardware wallet – whose maker now urges users to move funds immediately. Coinkite confirms the newer models may also be affected.
Updated 31 July 2026: Coinkite now says the newer Mk4, Mk5 and Q models may also be affected – with around 72 bits of entropy instead of the expected 128. That is less severe than on the Mk3, but still a real weakness. The manufacturer’s technical investigation is ongoing, and there is as yet no public proof that this specific flaw caused the 594 BTC sweep.
In the early hours of Thursday, one of the year’s largest crypto heists played out in front of the entire Bitcoin world. In just 15 to 25 minutes, roughly 594 bitcoin – worth about 38 million dollars – were drained from around 500 separate wallets and consolidated into a single address. Many of the affected wallets had sat untouched since 2021.
Much points to the victims having one thing in common: they appear to have stored their bitcoin on a Coldcard Mk3 – a popular "cold" hardware wallet that is meant to be among the safest ways to store cryptocurrency.
How the heist was discovered
The alarm went off when a desperate user posted on the r/Bitcoin forum on Reddit: "Full panic – one of my wallets was drained." They had done nothing but create the wallet and deposit funds. In the comments, others began analysing the blockchain, and the pattern that emerged was troubling: this did not look like a single theft, but like a coordinated attack against hundreds of addresses at once.
To drain a bitcoin wallet, the attacker must have the secret "key" – the so-called seed phrase of 12 or 24 words. That someone gained access to the keys of 500 different wallets in a short window points to a systematic weakness rather than to careless individual users.
The suspicion: a failure in the random number generator
The key to a bitcoin wallet is supposed to be impossible to guess because it is built on genuine randomness. Blockchain analysts examining the heist believe that this very randomness failed. "At first glance, it appears there was faulty entropy in wallet generation somewhere along the path," said Rob Hamilton, CEO of the firm AnchorWatch.
In other words: if the wallets were created with too little randomness, an attacker could in theory have calculated the keys in advance – then waited for the perfect moment and drained everything at once. It is important to separate two things here: that an entropy weakness exists in the product line is now confirmed by the manufacturer itself. Whether it is this specific weakness that emptied these 500 wallets, however, is still under investigation – there is as yet no public documentation directly linking the two.
The maker urges users to move funds immediately
Coinkite, the company behind Coldcard, issued a formal security advisory on July 31. It warns that seed phrases created on a Coldcard Mk3 running firmware version 4.0.1 or later may be at risk. In an update, the company says the newer models Mk4, Mk5 and Q may also be affected, but to a less severe degree – with around 72 bits of entropy instead of the expected 128. Users are urged to move their funds regardless.
Coinkite founder NVK simultaneously rejects the idea that this is a complete cryptographic breakdown of the devices, stressing that the analysis is still preliminary. The company highlights one important bright spot: users who added a separate passphrase (BIP-39 passphrase) on top of the seed appear to be at "minimal risk" – because that extra phrase is never generated by the device itself, but comes from the user’s own head.
Not the first case this summer
The heist comes just weeks after the "Ill Bloom" case, in which security firm Coinspect uncovered a similar weakness in the random number generation of several software wallets. There, at least 5 million dollars were stolen from addresses created as far back as 2018. Together, the two cases paint an uncomfortable picture: the very foundation of crypto security – that keys are impossible to guess – cracks when the randomness that creates them is not random enough.
What affected users should do
- Using a Coldcard? Follow Coinkite’s official advice: add a strong passphrase (BIP-39 passphrase) and move the funds to the new, passphrase-protected wallet. Since the newer models are now covered by the warning too, ordinary seed generation on the Mk4, Mk5 or Q can no longer be presented as fully safe – Coinkite points to a passphrase or a controlled "dice-only" process as safer alternatives.
- Do not panic and rush. Coinkite itself warns: "Rushing a wallet migration can create a more immediate risk than the issue you are trying to address." Test with a small transfer first, and do it calmly and correctly.
- Other brands: If you use another reputable brand, you are in all likelihood safe – but it is always wise to check the manufacturer’s security pages.
It is still unclear who is behind the heist, and whether the 38 million dollars can ever be traced. Either way, the entire crypto community is now watching closely to see whether more victims surface in the days ahead.
