An AI Just Cracked Coldcard (Is Your Bitcoin Safe?)

The Last Trade: an emergency episode. Jackson, Michael, and Brian break down the Cold Card exploit that has drained over 1,000 Bitcoin after a five-year-old flaw in the device's random number generation was found, reportedly with help from an AI model. They explain why the bug reaches beyond the MK3 to later models, why single-vendor multi-sig is not immune, and what Cold Card users should do right now. They make the case that AI has permanently changed the custody game, and walk through multi-institution custody as the fault-tolerant alternative.---🔸 Connect with Onramp: The leader in resilient, fault-tolerant Multi-Institution Custody for secure, enduring bitcoin ownership.👉 Reconsidering your security setup after the COLDCARD exploit? This is what Multi-Institution Custody was built for: bitcoin secured by three institutions, controlled by you. No single device, no single point of failure. Sign up in minutes with code TLTBASICS: https://app.onrampbitcoin.com/signup?utm_source=podcast&utm_medium=social&utm_campaign=ai-cracked-coldcard📩 Schedule a consultation:https://meetings.hubspot.com/onrampbitcoin/tltThe Last Trade: a weekly, bitcoin-native podcast covering the intersection of bitcoin, tech, & finance on a macro scale. Hosted by Jackson Mikalic, Michael Tanguma, & Brian Cubellis. Join us as we dive into what bitcoin means for how individuals & institutions save, invest, & propagate their purchasing power through time. It's not just another asset… in the digital age, it's The Last Trade that investors will ever need to make.🎙️ About This EpisodeBrian walks the timeline: roughly 600 Bitcoin (about $38M) swept from 500 wallets almost instantly, a figure Block's security team says has since grown past 1,000 BTC, all traced to a flaw that let Cold Card's on-device seed generation default to far too little entropy, live since 2021 and unnoticed for five years. Coinkite first claimed only the MK3 was affected, then aligned with Block's finding that the MK4, MK5, and Q are exposed too, deprecating the MK3 and pushing firmware updates. Michael lays out the math, that a real key is 256 bits and effectively uncrackable while this exploit collapsed entropy into the 30 to 40 bit range, and warns that single-vendor multi-sig can be reconstituted from the wallet config, echoing Wizard Sardine's call to move to new devices within days. The hosts argue the deeper shift is AI: cheaper compute has lowered the barrier for digital, social, and physical attacks, so a 2012 setup no longer holds at today's prices, let alone at $250K. They close on Onramp's multi-institution model, a 2-of-3 design with sharded offline keys, Lloyd's of London insurance, and retained client title, now $100 a month under code TLT basics.🧠 Chapters00:00 - Introduction to the Cold Card Exploit and Its Impact02:18 - Technical Breakdown of the Firmware Vulnerability05:11 - Implications for Hardware Wallet Security and Industry Risks08:45 - What the Exploit Means for Cold Card Users and the Industry11:01 - The Changing Landscape of Bitcoin Custody and Security Strategies20:18 - Potential Impact on Other Hardware Wallets and Industry-Wide Risks22:39 - Adapting Custody Strategies: Multi-Sig and Distributed Security33:22 - The Future of Bitcoin Security and Industry Evolution💡 Subscribe & Stay AheadGet Onramp's weekly Research & Analysis:High-signal insights in bitcoin, macro, and custody.📩 https://onrampbitcoin.com/researchSubscribe to Onramp Media for more:🎧 The Last Trade | Final Settlement | Scarce Assets