AI Used in Multi-Million Dollar Coldcard Bitcoin Wallet Hack, Says Coinkite

Coldcard hardware wallet owners have lost tens of millions of dollars in Bitcoin after an attacker used artificial intelligence to identify a technical flaw in the devices, according to Coinkite. The exploit resulted in a total loss of approximately $70 million, prompting warnings from industry figures regarding the absolute security of digital asset storage.

AI-Driven Exploit Targets Coldcard Hardware

Coinkite, the manufacturer of Coldcard, stated that an attacker utilized AI to discover a vulnerability within the hardware wallets. This flaw allowed the attacker to bypass security measures and drain funds from affected users. The total value of the stolen Bitcoin is estimated at $70 million, according to reporting from Decrypt.

Hardware wallets are designed to keep private keys offline to prevent remote hacking. In this instance, the use of AI to locate the flaw suggests a shift in how attackers identify vulnerabilities in previously secure physical devices.

CZ Warns Against Absolute Security Assumptions

Changpeng Zhao, the founder of Binance, responded to the $70 million exploit by advising Bitcoin holders that no security system is infallible. According to Decrypt, Zhao stated that Nothing is 100% when discussing the risks associated with wallet exploits.

Zhao’s comments highlight a broader industry concern that as AI capabilities advance, the tools used by attackers to find “zero-day” vulnerabilities in hardware and software will become more efficient and precise.

Impact on Coldcard Users and Market Implications

The exploit specifically targeted the Coldcard line of hardware wallets. While Coinkite has identified the use of AI in the attack, the company has not detailed the specific technical nature of the flaw that allowed for the theft of tens of millions of dollars.

This event marks a significant business risk for hardware wallet manufacturers, who market their products on the premise of “air-gapped” or offline security. The ability of an AI to uncover a flaw that leads to a $70 million loss challenges the perceived safety of cold storage solutions.

The loss of $70 million in Bitcoin represents a substantial hit to individual holders and raises questions about the recovery of funds, as Bitcoin transactions are generally irreversible once executed on the blockchain.