A significant cryptocurrency theft has seen nearly $100 million worth of Bitcoin drained from Coinkite hardware wallets. The incident, which unfolded over a prolonged period, highlights vulnerabilities within self-custody solutions.
Last Thursday, attackers began exploiting a five-year-old firmware flaw within Coinkite wallets, initiating a series of attacks. Approximately 1,600 BTC were reportedly extracted from around 7,300 affected addresses. The value of the stolen Bitcoin currently stands at over $100 million.
Swan, a U.S.-based platform facilitating the purchase, holding and self-custody of bitcoin, paused withdrawals for its clients following the attack. CEO Cory Klippsten responded by offering assistance to those needing help migrating their funds. He stated that his team “dropped everything” to contact clients and opened support to anyone requiring aid.
The initial flaw originated in a March 2021 firmware update produced by Coinkite. This had remained undetected for five years, allowing attackers sufficient time to identify and exploit the weakness. Galaxy Research reportedly provided research on the cryptocurrency market, though its direct involvement in the incident remains unconfirmed.
Swan continues to assist clients with the remediation process. The scale of the breach underscores the critical importance of regular firmware updates and rigorous security protocols within self-custody solutions. This event serves as a stark reminder of the ongoing risks associated with decentralized finance assets.
Written by Daniel Brooks
Security Desk
