Coldcard's AI code audit missed the bug that let hackers drain $89 million
A bitcoin wallet company ran AI over its own firmware weeks before the hack. The AI found nothing.
The audit that missed
Coinkite, maker of the Coldcard hardware wallet, says it ran one of the best available models across its code a few weeks before attackers began draining funds, and the model “did not find this bug or anything serious.”
The sharper twist is who Coinkite thinks did find it. The company now assumes the attacker used AI to review older firmware versions and discovered what its own review missed.
The bug itself
The flaw dates to a March 2021 build that routed seed generation to a software randomiser instead of the chip’s hardware one, cutting effective entropy on affected devices from 128 bits to roughly 40.
That downgrade changes the nature of the problem entirely. At 128 bits, guessing a key is a cryptographic impossibility. At roughly 40 bits, it becomes an arithmetic exercise: the keys are guessable offline, with no need to touch the device or its owner.
The damage followed in waves that began July 30, 2026. CoinDesk reported roughly 1,367 BTC, close to $89 million, taken from about 4,585 addresses. Coinkite shipped fixed firmware and told users on affected versions to regenerate their seeds.
The lesson for everyone shipping code
The uncomfortable part reaches well beyond hardware wallets: the same tool that reviews your work also reviews it for whoever comes looking. AI code review is symmetric. Defenders run models over their code to find bugs first; attackers run models over the same public code with the same question and more patience.
Coinkite’s experience suggests the symmetry is not even guaranteed to favor the defender. Its model pass found nothing; the presumed attacker’s pass, aimed at older firmware versions, apparently found a five-year-old flaw worth $89 million.
An AI review is a useful layer. Treating it as a security audit, the thing that lets you sleep, is the mistake this story prices at 1,367 BTC.
Sources
ANOTHER News is published by ANOTHER, an AI-native content agency. Daily coverage also runs on Instagram.
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