Binance Founder CZ Urges Wallet Diversification After $70 Million Coldcard Hack

Binance founder Changpeng Zhao is advising crypto holders to spread their funds across multiple wallets after a serious security failure hit Coldcard hardware devices, resulting in roughly $70 million in stolen bitcoin. The exploit stemmed from a firmware flaw dating back to March 2021, which weakened the randomness used to generate recovery seeds on certain Coldcard models, allowing an attacker to reconstruct private keys offline without ever touching the physical devices.

Losses Grew as Investigation Widened

Initial reports pointed to about 594 bitcoin, worth around $38 million, drained from roughly 500 wallets within a 25-minute window on July 30. Further analysis by Galaxy Research raised the total to 1,082.65 bitcoin, valued near $70 million, taken from 1,196 addresses over about 41 minutes, many of which had sat untouched for years.

Coinkite Responds With Emergency Fix

Coldcard maker Coinkite confirmed the bug, apologized, and released emergency firmware updates. The company warned that simply updating firmware does not protect wallets that already generated seeds under the flawed system, urging affected users to create new seeds on patched devices and migrate funds carefully.

CZ Says No System Is Fully Risk-Free

In a post on X, CZ said even hardware wallets and long-established devices can carry undiscovered bugs, suggesting that splitting funds across several wallets may help reduce exposure, while acknowledging the approach brings its own added complexity in managing multiple keys.