Understanding the Coldcard RNG Flaw & Why Firmware Updates Aren't Enough

Coinkite's Coldcard hardware wallets recently suffered a critical Random Number Generator (RNG) entropy flaw that severely compromised seed phrase generation across multiple device generations.

The flaw originated from a build header configuration bug (MICROPY_HW_ENABLE_RNG (0)) in the underlying MicroPython firmware compilation. When hardware RNG support was accidentally disabled, the system failed to throw an error or halt execution. Instead, it silently degraded to a deterministic software pseudo-random number generator (Yasmarang) that relied on predictable inputs like device serial numbers and system clocks.

As a result, seed phrases generated on affected devices had drastically reduced entropy—dropping to as low as 40 bits of effective entropy on older Mk3 units and approximately 72 bits on Mk4, Mk5, and Q models, far below the cryptographic standard of 128 or 256 bits. Attackers were able to precompute seed phrases offline and drain tens of millions in Bitcoin across thousands of addresses.

Crucial Action Required: Patching your Coldcard firmware fixes future seed phrase generation, but it does not secure seed phrases created while running vulnerable firmware. If your seed phrase was generated on an unpatched Coldcard, your private keys remain mathematically weak forever. You must generate a completely new seed phrase on patched firmware or an alternative secure wallet and immediately sweep your funds.

Prepare a Secure Crypto Continuity Vault →

Step 1: Determine If Your Coldcard Seed Phrase Is At Risk

Any seed phrase generated directly on a Coldcard device using default settings without manual dice roll entropy prior to the official firmware hotfix is vulnerable.

To evaluate your risk profile:

  1. Check device model and firmware version: Mk3, Mk4, Mk5, and Q series devices running vulnerable firmware builds used the degraded Yasmarang software fallback.
  2. Review how the seed was created: If you accepted the default automated seed generation on the device without adding manual dice rolls, your seed phrase has insufficient entropy.
  3. Assume exposure if generated on affected firmware: Even if your wallet has not been drained yet, attackers continue to scan weak entropy spaces offline. Treat any affected seed as actively compromised.

Do not attempt to send partial funds or test small transactions first if you are actively being targeted; prepare a single clean transaction to sweep full balances.

Step 2: Generate a Clean Seed Phrase on Patched Firmware or Alternative Wallet

Before moving any funds, you must establish a fresh, cryptographically secure destination wallet.

Option A: Using Coldcard with Verified Firmware Hotfix + Manual Dice Rolls

  1. Download the latest official firmware hotfix from Coinkite's official repository (Mk3 v4.2.0+, Mk4/Mk5 v5.6.0+, Q v1.5.0Q+).
  2. Verify the firmware binary signature using PGP keys before installing it on your device via SD card.
  3. During new wallet setup, enable Dice Rolls (BIP-39 entropy addition). Roll a physical 6-sided die at least 50 to 100 times to manually inject true physical randomness into the seed generation process. This ensures full 128-bit or 256-bit entropy regardless of hardware RNG states.

Option B: Using a Secondary Secure Hardware Wallet If you choose to migrate away from Coldcard, initialize a fresh wallet on a separate hardware architecture (such as BitBox02 or Trezor Safe 5) that uses open-source hardware TRNGs and verified firmware.

Step 3: Safe Fund Migration Protocol (Preventing Front-Running & Phishing)

Transferring funds under threat requires strict operational security to prevent clipboard hijacking, front-running, or phishing attacks.

  1. Verify Receive Addresses On-Device: Always verify the new receive address directly on the hardware screen of your destination device. Never copy-paste addresses without checking every character.
  2. Prepare Air-Gapped PSBTs: Create a Partially Signed Bitcoin Transaction (PSBT) using your wallet coordinator (such as Sparrow Wallet or Electrum) connected to an air-gapped SD card.
  3. Sweep Full Balances: Broadcast a single transaction sweeping the entire balance to the new seed phrase address. Ensure sufficient transaction fees (sats/vB) to prevent the transaction from sitting unconfirmed in the mempool for extended periods.
  4. Avoid Web Recovery Tools: Never type your old or new seed phrases into any website, browser extension, or online recovery service. Hardware seed phrases must never touch an internet-connected keyboard.

Step 4: Update Your Emergency Recovery Plans and Vault Instructions

Once your funds are safely resting on the new seed phrase, update all secondary security and contingency layers:

  1. Destroy Old Physical Backups: Clear or destroy old metal plates or paper seed sheets associated with the compromised seed.
  2. Update Metal Seed Backups: Stamp your fresh seed phrase onto stainless steel or titanium backups stored in secure locations.
  3. Update Contingency Vaults: If you maintain automated contingency guides or dead man's switch vaults for heirs or co-signers, update those vault payloads with the new wallet instructions.

Using a dead man's switch service like ZeroLatch allows you to store client-side encrypted vault notes and migration runbooks that release to trusted recipients only if you miss scheduled check-ins (with a 1-day minimum check-in interval). Keeping your emergency instructions updated ensures your beneficiaries never attempt to recover funds using a deprecated, vulnerable seed phrase.

Set Up an Emergency Recovery Runbook in ZeroLatch →