Coldcard has released firmware versions 5.6.1 and 1.5.1Q after a three-week security review, while warning that users with affected seed phrases must create new wallets and move their Bitcoin.
Summary
- Firmware 5.6.1 covers Coldcard Mk4 and Mk5, while version 1.5.1Q applies to Q devices.
- New seed creation now requires key presses, dice rolls, or coin flips supplied by the user.
- Installing the firmware does not repair seed phrases created under affected versions.
- Coldcard advised users to verify the signed update before generating a replacement wallet.
Coldcard firmware adds mandatory user entropy
Coldcard said in an Aug. 20 post that the latest release followed three weeks of review after its July 31 emergency fix, which addressed a flaw in how some versions of its firmware generated wallet seed phrases.
The Bitcoin hardware wallet maker released version 5.6.1 for its Mk4 and Mk5 devices and version 1.5.1Q for Coldcard Q. According to the company, the review covered the earlier seed-generation failure and several areas involved in transaction signing, device connections, firmware installation, and random-number checks.
Under the updated process, every new seed phrase must receive at least one source of randomness directly from the device owner. Users can provide it through at least 65 key presses with unpredictable timing, 50 private rolls of a physical six-sided die, or 128 physical coin flips.
Coldcard said the device combines that user input with fresh data from the STM32 true random-number generator and its two secure elements, known as SE1 and SE2. Requiring input from separate sources reduces reliance on any single component during seed creation, according to the company.
“Every newly generated seed now requires one source of user entropy,” Coldcard said.
Users must keep their key presses, dice results, or coin tosses private because anyone who records the inputs may gain information that could help reconstruct the resulting wallet. The company’s instructions treat its standard seed process separately from its advanced dice-only method, which has its own minimum requirements.
Existing Coldcard seeds cannot be repaired by updating
Installing the latest release only changes how Coldcard creates seeds after the update. The company warned that firmware cannot add missing randomness to a seed phrase that was generated previously.
Affected users must update their device first, create and verify an entirely new seed, and transfer their Bitcoin to addresses controlled by the replacement wallet. Importing the old words into updated Coldcard firmware, a different hardware wallet, or a software wallet preserves the same weakness because the underlying seed remains unchanged.
Coldcard advised users to record the replacement seed offline, confirm the wallet’s receiving address on the device screen, and complete a small test transfer before moving the full balance. Owners should keep the old backup until they have checked that the migration succeeded, but they should not continue using it to receive funds.
As reported on Aug. 2 by crypto.news, the official warning applies to seeds created on specific firmware versions rather than every seed ever produced by a Coinkite device. Mk2 and Mk3 seeds generated on versions 4.0.1 through 4.1.9 fall within the affected range.
For Mk4 and Mk5 devices, the advisory covers seeds generated before standard firmware 5.6.0 or Edge firmware 6.6.0X. Coldcard Q users are covered when their seeds were created before standard version 1.5.0Q or Edge version 6.6.0QX.
Mk1 devices are outside the firmware regression identified by researchers, while Coinkite products, including TAPSIGNER, OPENDIME, and SATSCARD, use different software and are not covered by the same disclosure.
Coldcard previously identified an exception for wallets whose owners added at least 50 fair, independent, and private dice rolls before their final seed words were produced. According to the company, the rolls supplied at least 128 bits of independent randomness. Users who cannot remember how many rolls they entered, used fewer than 50, or exposed the sequence were advised to migrate.
A BIP-39 passphrase can create another barrier between an attacker and a wallet, but Coldcard said a passphrase does not repair the seed itself. Owners of affected seeds were therefore told to replace the underlying recovery phrase even if they had added a strong passphrase.
Firmware 5.6.1 tightens signing and device boundaries
Beyond seed creation, the release adds staged verification of partially signed Bitcoin transactions immediately before signing. A partially signed Bitcoin transaction, commonly called a PSBT, lets a wallet review and approve transaction data without exposing its private keys to an online computer.
Coldcard said the new check divides PSBT verification into stages before the device produces a signature. The company also changed its default SIGHASH handling, which determines which parts of a Bitcoin transaction a signature covers.
Additional changes strengthen the boundaries around USB connections and firmware updates. The release also improves Delta Mode isolation, fixes backups involving the active wallet, and adds checks around random-number generator initialization and possible faults.
Users downloading the update were told to verify its digital signature before installation. Firmware signatures allow an owner to check whether a file came from Coldcard and whether it was altered after publication.
The release follows a seed-generation flaw introduced during a firmware change in March 2021. Block’s Bitcoin engineering and security team said affected software called a deterministic MicroPython fallback when creating wallet seeds instead of using the intended STM32 hardware random-number generator.
According to Block’s review, older Mk2 and Mk3 devices could produce seeds with about 40 bits of effective randomness, while vulnerable Mk4, Mk5, and Q devices received some input from a secure element but reached only about 72 bits. Both figures were below the intended 128-bit level, making some seeds practical to search offline.
An attacker who generated possible seeds could derive their Bitcoin addresses and compare them with public blockchain records. Finding a match would provide the private keys needed to transfer the funds without obtaining the physical device, learning its PIN, or attacking the Bitcoin network.
A subsequent analysis of the flaw detailed four suspected attack waves that removed an estimated 1,816 BTC from more than 5,200 addresses. Loss estimates have varied as researchers separated confirmed victim reports from addresses identified through transaction patterns.
Coldcard attack changed custody choices for US holders
The incident also affected how some Bitcoin owners approached custody. An Aug. 4 report on exchange inflows cited OKX Chief Compliance Officer Jonathan Brockmeier as saying the exchange recorded unusually high deposits after the Coldcard attacks.
“We’re seeing record levels of inflows now to centralized exchanges post-Coldcard,” Brockmeier said.
Moving Bitcoin to an exchange removes the owner’s direct responsibility for seed generation and storage, but it places control of the assets with a third-party custodian. US investors who only want exposure to Bitcoin’s price can also use spot Bitcoin exchange-traded funds, whose shares trade through regulated brokerage accounts while institutional custodians hold the underlying Bitcoin.
Galaxy Research said it shared suspected attacker addresses with exchanges, blockchain investigators, and US federal law enforcement agencies. The research firm also reported in early August that about 90% of the Bitcoin taken during the confirmed attack waves had not moved from the identified destination wallets.
