Bitcoin activity reaches 2024 high after Coldcard security breach | News. az
Bitcoin network activity surged in early August after a vulnerability affecting certain Coldcard hardware wallets prompted holders to move their funds into newly generated wallets and alternative custody. . .
Bitcoin network activity surged in early August after a vulnerability affecting certain Coldcard hardware wallets prompted holders to move their funds into newly generated wallets and alternative custody arrangements. Blockchain analytics firm Glassnode reported that daily active Bitcoin addresses climbed to 0. 98 million, the highest level since December 2024. The firm said the increase appeared to be driven primarily by security concerns rather than a fundamental shift in market sentiment. The spike followed the disclosure of a Coldcard firmware vulnerability that reportedly exposed certain recovery seeds generated under flawed conditions. According to the report, the vulnerability stemmed from a firmware bug introduced in March 2021 that caused some seeds to be generated using weak, predictable randomness rather than the device’s hardware random number generator. RECOMMENDED STORIESGeorgia launches sabotage probe into allegations of mistreatment of Russian touristsPacific foreign ministers gather in Fiji for high-stakes regional talksOpenAI, Anthropic AI agents face scrutiny over new security breachesWhat is behind deadly violence in Nigeria?The reported exploit has resulted in more than $130 million in potential losses, according to research cited in the report. Glassnode said the surge inBitcoinactivity largely reflected holders moving funds away from potentially affected wallets. Many users migrated their recovery seeds and transferred Bitcoin into alternative custody arrangements and newly generated wallets. The security response was far larger than the initial theft. Glassnode’s Week 31 report focused on a July 31 incident in which approximately 594 BTC, worth around $38 million at the time, was stolen in roughly 25 minutes. The report said dormant Bitcoin holdings amounting to roughly 200 times the stolen amount subsequently began moving across the network as holders rotated funds out of potentially compromised wallets. Only about 10% of the transferred Bitcoin reached exchanges, suggesting that most of the movement represented wallet migration rather than selling. Research from Galaxy Research, updated Aug. 4, put the confirmed scale of the theft at 1,596 BTC taken from approximately 7,300 addresses across three major attack waves and 14 smaller incidents. The confirmed losses exceeded $100 million at prevailing prices, while unconfirmed losses could add another $30 million or more. A suspected fourth attack wave could increase the total to around 2,055 BTC, although that figure was not included in the confirmed tally. Despite the dramatic increase in on-chain activity, the report said the spot Bitcoin market showed little immediate reaction to the security incident. At the same time, US-listed spot Bitcoin ETFs recorded three consecutive days of net inflows totaling approximately $626 million, indicating continued institutional demand during the period. The incident has also highlighted an important limitation of hardware wallet security: a firmware update cannot retroactively secure a recovery seed that was already generated under vulnerable conditions. The large number of Bitcoin transfers therefore appears to have been primarily a defensive response. With only a small share of the moved coins reaching exchanges, the data suggests that many holders were seeking safer storage rather than attempting to sell their assets. The Coldcard incident has consequently become a major reminder that self-custody security depends not only on protecting a hardware device, but also on how the underlying recovery seed was originally generated. News. AzBy Aysel Mammadzada