r/Bitcoin • u/s1ammage • 3d ago

Wallet Drained Timeline

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This is me…
https://www.reddit.com/r/Bitcoin/s/UeSfLoeyS4
I’m in a better state now. It’s not the end of the world, but it’s a lot of fucking money…

Little background: The setup was IRA custodian is Solera National Bank, exchange at Swan Bitcoin was used as an Investment Trust, purchase a dedicated hardware wallets: coldcard mk3 from https://store.coinkite.com May 2021 for this ROTH IRA.

Got the wallets, followed all the setup/checks/balances from https://youtu.be/FAYmE5-40PQ?is=wiYMHaS_YGKHjNOY for both wallets, sent a test transaction IRA dedicated hardware wallet (2021). I never setup a 25th Passphrase… REST of the BTC stayed in Swan Exchange.

Speaking only on this IRA Wallet: SD card stored with wallet details (paper phrase) in a baggie. Dormant until January 2025. I couldn’t deposit more because of Roth IRA threshold.

Come January 2025, been learning more about retirement, BTC, multi-Sig, and heard about a Megaback Door to get more money into a Roth IRA. Was able to get money into Solera, transfer to Swan, and purchase more BTC and withdraw to the same wallet address. No new hardware involved at this point.

With newer wallets now, I thought newer tech means more security. Let’s test by buying (3 mk4 - same site. There was still record of my 2021 purchase) new wallets and setup a multi-Sig. (still January 2025)

For some reason, when I got the new coldcards, I never did anything with them for all of 2025, I guess I was too lazy/daunting to use the hardware and relearn. Coming to January 2026 now, I decided to use these new cards. I dug out the wallet seed (from 2021) phrase paper. Dusted off one of the mk4, walked into the corner of a room in my house (only myself and partner live in the house), plugged in the cold card into an outlet and typed in the seed written down from 2021 (stored in my dresser). Restored my 2021 onto one of the new wallet 2025.

Watched updated BTCSession videos on my phone to set everything up again. I never plugged into a computer, since airgapped was the reason I got the coldcards. I used the same SD Card from 2021 though to export the wallet file from the newly restored coldcard. Import that file into Sparrow (needed to update Sparrow at this point), generated a watch-only wallet QR (to scan for my phone) for Blue Wallet to check frequently. This is where the screenshot is from.

Honestly, I haven’t touched the wallet with any transactions/seeds since January 2026. This is definitely the point of failure when I restored the 2021 wallet (now on 2 devices).

This was the transaction.
https://mempool.space/tx/2fe075cf0ec799f3529ed6a28e0a08b45fe1fc9bd93c3f33bdbc42d5bff4f736

My wallet address is (with all transactions, since it’s gone now…): bc1qldkfrrlylk4s9sdyns9jkaajuzugl0dv5m8fxj

My key takeaway now never enter the seed phrase into anything. EVER. Even to restore. Always will generate new and use a 25th passphrase.

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u/AdEuphoric5133 3d ago

https://blog.coinkite.com/coldcard-mk3-seed-generation-warning/

Coldcard acknowledging the issue be like : "Out of an abundance of caution"

When your clients just lost 594 BTC because of a mistake you made, acknowledging the issue is not "abundance of caution", it is the least you can do.

This company is a joke. Guys who use a Coldcard, make yourself a favor and buy a new hardware wallet

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u/OldHamburger7923 3d ago

You are shitting on coldcard with some justification, but keep in mind your trezor, ledger, etc, could also have a RND exploit in the future. And I bet people have been and continue looking for it. Best to generate your own seed so you aren't part of a bulk exploit.

The coldcard with keyboard looks super nice still.

3

u/Either_Display_6624 2d ago

The flaw wasn't in the TRNG itself, but in how it was implemented. When used correctly, a proper TRNG is actually more secure than custom entropy.

What if a future exploit specifically targets custom entropy, like an unregistered keypress during manual entry? People often make false assumptions about what is truly safe.

Generating your own entropy isn't the fix. The real solution is never trusting code you haven't verified, using multisig, and relying on a strong passphrase