Bitcoin transfers under 1 BTC climbed to their highest daily level since November 2022 on Friday, as a suspected hack tied to Coldcard wallets pushed estimated losses to $88.6 million across 4,585 addresses. Researchers say the attack, which surfaced in late July, remains active and has reignited debate over the safety of self-custody.
Suspected hackers have drained an estimated $88.6 million in Bitcoin from Coldcard wallets, pushing transfers below 1 BTC to their highest daily level since the FTX collapse and reviving debate over whether self-custody protects crypto holders better than exchanges do.
Bitcoin users moved 39,600 BTC in transactions under 1 BTC on Friday, according to data CryptoQuant head of research Julio Moreno shared on Saturday. That is the largest such total since Nov. 16, 2022, when 39,900 BTC changed hands days after FTX filed for bankruptcy. According to Moreno, Friday's total came within 300 BTC of the November 2022 level: "The Bitcoin plebs had not moved this amount of BTC in a day" since FTX collapsed, and he added that he was encouraged to see users respond to the incident.
Losses reach $88.6 million across three attack waves
The suspected Coldcard hack first surfaced in late July and appeared to remain active at the time of publication, as researchers continued to uncover new victims. Galaxy Research, the research arm of Galaxy Digital, reported an additional wave draining 207.7 BTC, worth about $13.2 million. The theft has brought estimated losses to 1,367 BTC, worth $88.6 million, across 4,585 addresses.
Alex Thorn, Galaxy Digital's head of firmwide research, warned in an X post that the attack was still ongoing and urged users to move funds from Coldcard-generated addresses immediately if they had not already done so. He said his team kept identifying new victim and attacker addresses, and that user reports had helped researchers and authorities track the stolen funds.
Self-custody debate splits crypto and TradFi
Bitcoin self-custody, the principle that lets users control their funds without relying on third parties, is now at the center of the debate the incident reignited. Nick Neuman, CEO of Bitcoin security company Casa, pushed back against claims that self-custody is over, arguing that its distributed nature gave users time to react. He estimated that potentially 10 times more Bitcoin was protected through self-custody than was stolen and identified in the attack so far.
Traditional finance voices also weighed in. Eric Balchunas, senior ETF analyst at Bloomberg, argued that Bitcoin exchange-traded funds provide a safer and more convenient alternative for many users, pointing to the long operating history of the ETF industry. Others countered that the Coldcard incident reflects a failure of one wallet provider rather than a failure of self-custody itself.
Source: Cointelegraph.com News
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