Cold cards will now require 65 key entries after the seed vulnerability issue, and existing wallets must be migrated

Bitcoin hardware wallet manufacturer Coinkite announced the release of a new standard firmware for the Coldcard wallet on August 20th. This update focuses on ensuring that a human directly provides physical randomness during the seed generation process. Users are now required to perform one of the following actions: enter at least 65 keys with unpredictable intervals, roll a six-sided die 50 times, or flip a coin 128 times. This requirement is intended to reduce the risk associated with relying solely on the wallet's random number generator (RNG). The versions subject to the recommendation are numerous. For Mk2 and Mk3 models, this includes firmware versions 4.0.1 through 4.1.9. For Mk4 and Mk5 models, it includes standard firmware versions below 5.6.0 and Edge firmware versions below 6.6.0X. For Q devices, it includes standard firmware versions below 1.5.0Q and Edge firmware versions below 6.6.0QX. Block's independent technical analysis revealed that the scope should extend even further, including Mk2 and Mk3 models up to version 4.0.0. This analysis warned that relying solely on the safety standards provided by the manufacturer is not sufficient to ensure safety. The root cause of this vulnerability lies in the MicroPython fallback code. According to Block's analysis, a function flag defined as 0 was treated as "existing," which could have resulted in a request for random number generation being routed to a deterministic fallback. This significantly weakened security because, in cases where a seed was generated without sufficient external entropy, the system could have used a predictable fallback. While forced physical input is intended to limit the damage if future random number generation fails, it cannot be applied retroactively to seeds that have already been generated. This update includes several security enhancements in addition to seed generation. It links USB reviews to the step-by-step PSBT checksum, re-verifies transaction bytes before signing, and blocks the SIGHASH_SINGLE mode by default. It also restricts USB downloads to the current encrypted session results, adds firmware file length validation, stops persistent RNG failures, and includes a feature to verify the hardware RNG connection during boot. There is one exception to the migration requirement. Users who were using vulnerable firmware and have rolled the dice more than 50 times under fair, independent, and confidential conditions are exempt from the migration. However, if the number of rolls is insufficient or if there is no certainty about these conditions, a new seed must be generated, and the funds must be migrated. The official CoinKite guide recommends the following steps for creating a new seed: generating the new seed, backing it up, verifying the wallet fingerprint, confirming the receiving address on the device, sending a small test transaction, and then migrating the entire balance. Wallet cloning or restoration is not considered the creation of a new seed. Coinstrike announced that some customers have suffered significant losses, and that investigative authorities are currently conducting an investigation. However, the company did not disclose the number of confirmed victims or the total amount of losses. Furthermore, it stated that the currently disclosed inspection items (source code review, physical device RNG path testing, reproducible builds, and dice path tracking) do not constitute a complete audit of the entire modified binary.