Coinkite Sued in Class Action Over $140M Bitcoin Theft Linked to Wallet Flaw

Key Facts

1Coinkite faces a class-action lawsuit following a security flaw in Coldcard wallets that allegedly led to the theft of over $140 million in bitcoin.

2The lawsuit claims the devices generated predictable recovery phrases, exposing customer funds to theft.

Coinkite faces a class-action lawsuit following a security flaw in Coldcard wallets that allegedly led to the theft of over $140 million in bitcoin. news.bitcoin.com reported that the lawsuit claims the devices generated predictable recovery phrases, exposing customer funds to theft by allowing attackers to recreate private keys.

The legal action focuses on a flawed entropy mechanism used by Coldcard devices, which the complaint alleges undermined the entire security purpose of the hardware. The case highlights significant risks to the reputation of self-custody solutions within the crypto industry.