Coldcard, the maker of a popular bitcoin hardware wallet, has released new firmware following a $114 million bitcoin theft, saying an artificial intelligence-assisted review helped uncover additional bugs during the three-week audit process.
What Prompted the Update
The firmware release comes in the wake of a major security incident that saw users lose $114 million in bitcoin. Over roughly three weeks, Coldcard conducted an extensive review of its code, turning up several problems that were unrelated to the original flaw responsible for the losses.
According to the company, artificial intelligence tools played a role in identifying more vulnerabilities than a traditional review might have caught. The use of AI in the audit process reflects a growing trend among security-focused firms looking to bolster their code inspection with automated analysis.
Updating the firmware does not undo the damage — a compromised wallet remains compromised.
Why the Fix Has Limits
Despite the new firmware, Coldcard has been clear that installing the update will not restore safety to a wallet that has already been compromised. Users whose devices were affected by the underlying flaw cannot simply patch their way back to security, a caveat that underscores the seriousness of the original breach.
The distinction matters for owners weighing what steps to take next. A firmware update can close vulnerabilities going forward, but it cannot reverse a compromise that has already occurred, meaning affected users may need to take additional precautions.
Key points from the release include:
- Three weeks of review uncovered bugs beyond the original flaw
- AI assistance helped catch more issues during the audit
- The update does not make an already-compromised wallet safe again
The Bigger Picture
The incident and its aftermath highlight the ongoing security challenges facing hardware wallet makers, whose products are designed to protect large sums of digital assets. Even devices marketed for their robust security can harbor flaws that, when exploited, lead to substantial losses.
For the broader crypto community, the episode serves as a reminder that self-custody carries its own risks, and that firmware maintenance and prompt updates remain a critical part of keeping funds secure.