Binance founder CZ calls for wallet diversification after $70 million Coldcard exploit
Binance founder Changpeng Zhao has advised crypto users to diversify their holdings across multiple wallets following a $70 million exploit of Coldcard hardware devices. The breach, caused by a firmware flaw, highlights the inherent risks of self-custody even with established hardware security solutions.
Why it matters
The incident serves as a significant warning for the crypto industry regarding the limitations of hardware security and the necessity of risk management strategies.
On Saturday, Binance founder Changpeng Zhao, known as CZ, asked crypto holders to split their funds across multiple wallets following a major security failure in popular Coldcard hardware devices.
“Even hardware wallets can have bugs. Even old wallets (with long history) can have bugs. How to mitigate? Split your funds in a few wallets maybe? This has a different set of risks. Nothing is 100%. Stay informed. Stay SAFU!,” he said.
On July 30, some bitcoin users discovered that funds from their Coldcard wallets had been stolen in a series of unexpected transactions. The attacker exploited a firmware flaw dating to March 2021 that weakened the randomness used to generate recovery seeds on certain Coldcard models. By reconstructing private keys offline, the attacker was able to drain funds without ever physically accessing the devices.
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