Coinkite, the Canadian company behind the Coldcard hardware wallet, has released new firmware following the discovery of a randomness flaw that enabled the theft of more than $114 million in bitcoin. The vulnerability existed in firmware versions used between 2021 and July 2026, affecting Coldcard Mk4, Mk5 and Q devices.

The audit, assisted by AI tools such as Kimi and other frontier models, identified additional issues in transaction approval, USB data handling and firmware validation. The updated firmware (version 5.6.1 for Mk4 and Mk5, 1.5.1Q for the Q model) requires users to generate new seeds using physical randomness, such as dice rolls, coin flips or key presses, and replaces the underlying random number generator with a SHA‑256 based algorithm. New checks verify transaction approval immediately before signing, preventing alteration after the user confirms on the device screen. Installation must be performed from the official downloads page; compromised wallets still require seed regeneration and fund migration. Law enforcement continues to investigate the theft, and Coinkite said it is cooperating with authorities.

The release is part of a broader trend in which AI is being used to improve security reviews across the bitcoin ecosystem, with projects like BTCPay Server offering bounties, an open letter from major crypto firms urging AI labs to grant researchers early model access, and the Bitcoin Red Team publishing thousands of vulnerability findings. Bybit reported that AI‑assisted audits identified high‑severity flaws at three to five times the rate of manual reviews and helped block $700 million in suspicious withdrawals during the first half of 2025.

The incident underscores ongoing challenges in hardware wallet security and the growing role of AI in detecting and remedying cryptographic flaws.