Key highlights:
- Coinkite warned that some Coldcard Mk3 users may be at risk after a security incident drained 594 BTC from several wallet addresses
- The security scare has put the hardware wallet industry under pressure
- Pundits say the incident could strengthen the appeal of institutional custody options like BlackRock’s IBIT as investors weigh the risk of managing their own bitcoin
Hardware wallet maker Coinkite has warned some users of its Coldcard Mk3 devices that their bitcoin may be at risk after 594.5 BTC worth around $38 million was drained from 500 wallet addresses. The advisory put the hardware wallet industry under fresh scrutiny, with analysts predicting larger inflows into BlackRock’s IBIT ETF amid the security concerns
Security warning follows coordinated Bitcoin drain
The is considered the safest way to store digital assets, the latest incident has ignited debate in Bitcoin circles. Pundits are debating whether retail investors are better served by managing their own keys or gaining Bitcoin exposure through regulated investment products.
“The self-custody industry will never recover from this,” said pseudonymous X user Zynx. “BlackRock’s IBIT is about to get even more popular.”
Spot Bitcoin ETFs like BlackRock’s IBIT eliminate the need for seed phrases and hardware devices by relying on professional custodians to safeguard the underlying Bitcoin. While Bitcoin ETFs are set to record their lowest net monthly inflow, experts are predicting a surge in inflows before July comes to a close.
Meanwhile, hardware wallet makers Trezor and Foundation have reassured users that their funds are safe and secure despite the Coldcard scare. However, on-chain investigator ZachXBT branded hardware wallets as “garbage,” urging holders to use a dedicated iPhone to store their digital assets.
Source:: Coldcard Security Scare Puts Hardware Wallet Industry Under Pressure After 594 BTC Drain