Coldcard attacker moves 45% of stolen Bitcoin through THORChain and CoinJoin, Galaxy reports

The hacker behind the third wave of Coldcard hardware wallet exploits has started cashing out, routing approximately 97.09 BTC, worth about $7.8 million, through cross-chain swaps and mixing services over a five-day window. Galaxy Research flagged the movement on September 7, noting it represents roughly 45% of the Wave 3 stolen funds. The funds first hit THORChain on September 2, where they were swapped into Ether. By September 5 and 6, additional portions had been run through CoinJoin transactions, a Bitcoin privacy technique that bundles multiple users’ transactions together to obscure the trail. The attacker appears to be working through the largest vaults first, a prioritization strategy that suggests deliberate planning rather than panicked liquidation. A firmware flaw five years in the making A firmware update shipped by Coinkite in March 2021 (version 4.0.1 onward) introduced a bug that caused Coldcard devices, primarily the Mk3 and later models, to default to a software-based pseudo-random number generator when creating wallet seeds. The hardware random number generator was effectively bypassed. The result: seeds generated with only 40 to 72 bits of effective entropy. For ...