GoPlus Security 🚦 (@GoPlusSecurity): The @COLDCARDwallet incident has already led to roughly $38M in BTC being stolen. The real warning sign is not simply that a “hardware wallet was comp…

The @COLDCARDwallet incident has already led to roughly $38M in BTC being stolen. The real warning sign is not simply that a “hardware wallet was compromised,” but that if entropy is flawed at the seed generation stage, even strong cryptography may rest on a broken foundation. Coinkite has confirmed that affected seeds generated on Mk4/Mk5/Q before the fixed firmware releases had only ~72 bits of entropy instead of the expected 128 bits. Mk3 is also affected, with even higher risk. More importantly, AI is rapidly reducing the time and cost needed to find weaknesses in cryptographic designs, RNG assumptions, and implementations. Recent results have significantly weakened a post-quantum candidate like HAWK and improved theoretical attacks on 7-round AES by 200-800x. AI has not broken full AES or Bitcoin in the real world, but it is already reshaping how we think about the security margins of traditional cryptographic systems. For users, the key question is no longer just whether the seed phrase was stored offline, but how the seed was generated in the first place. Per official guidance, affected users should migrate to a new seed ASAP: either generate it on an unaffected device, or upgrade Mk4/Mk5 to 5.6.0+ and Q to 1.5.0Q+ before creating a new one. If Mk3 is the only option, a strong and unique BIP39 passphrase can be used as a temporary isolation layer, but never enter it on a website or any untrusted device. Always verify the XFP, send a small test transaction first, and only then move the full balance. The future of crypto security is no longer just about algorithm strength. It is about the combined security of entropy sources, implementations, devices, processes, and user operations.