Weak Seed Generation Flaw Led to $70M Bitcoin Cold Wallet Theft

Attackers stole over 1,000 BTC worth approximately $70 million from nearly 1,200 cold wallets without ever physically accessing the devices. According to Galaxy Research, the vulnerability stemmed from weak seed phrase generation, which made private keys predictable and reproducible. The attacker was able to recreate likely private keys entirely offline and systematically drain the affected wallets. The breach highlights a critical security gap where hardware wallet integrity alone cannot protect funds if the underlying seed generation process is flawed. Galaxy Research noted the attacker continued scanning for additional vulnerable wallets even after the initial sweep.