A major flaw in crypto hardware saw hundreds of bitcoin holders fleeced of AUD $54 million in as little as 25 minutes.
It came as bitcoin, which has declined roughly 50 per cent since its October 2025 high, came under fresh pressure at the weekend, dropping below USD $63,000 on Saturday AEST.
The brazen heist took place earlier this week and saw roughly 594 Bitcoin (BTC) taken from roughly 500 separate wallets in an attack traced to a flaw in Coldcard hardware wallets, according to coindesk.
About 594 bitcoin was swept up from 500 wallets, as hackers exploited a flaw in how Coldcard hardware wallets generated their keys.
Then 562 BTC was consolidated into a single address that has not moved since.
Every drained wallet held more than 0.15 BTC and many had been dormant for years, with their coins spanning from 2021 to 2026.
Coldcard is a hardware wallet built by Canadian firm Coinkite. It is a small stand-alone device which stores bitcoin keys offline and away from internet-connected computers.
The bug is said to have affected Coldcard generations Mk2, Mk3, Mk4, Q and Mk5.
According to coindesk, exposure to the hack depends on the firmware the device was running on at the moment the wallet was first created, and not when the hardware was bought.
A wallet’s seed – the secret phrase controlling the funds – is supposed to be pulled at random from a pool so vast that guessing it is hopeless.
Coldcard’s firmware was allegedly not doing that.
According to a report published by Block’s Bitcoin engineering and security teams, a setting in the firmware told the device to skip its own random key generator.
Instead, that job fell on software that uses the chip’s serial number and clock registers, which are not secret.
Coinkite acknowledged the bug and warned users anyone relying on an Mk3 running version 4.0.1 or later would be affected.
In June, bitcoin suffered its steepest sell-off in months, briefly plunging below USD $62,000 and triggering a brutal wave of liquidations that wiped USD $1.26 billion in just 24 hours.
Over 208,000 traders were liquidated during the crash, according to the latest CoinGlass data, with bitcoin accounting for more than USD $800 million (AUD $1.2 billion) in losses.
The sudden sell-off has rattled investors who only months ago were celebrating record highs and growing Wall Street adoption of the world’s largest cryptocurrency.
Now, some are openly questioning whether a deeper correction is underway.
The crash comes amid a sustained exodus from US spot Bitcoin exchange-traded funds, with investors pulling approximately USD $1 billion (AUD $1.5 billion) from the products in late May and early June.
The withdrawals have extended the funds’ worst streak of net outflows since their launch and raised new concerns about weakening institutional demand.
Research firm Presto said Bitcoin’s weakness could potentially reflect broader shifts in investor sentiment, which has taken a serious hit following the US-Iran hostilities, rather than a crypto-specific problem.