Coldcard hack sparks biggest sub-1 BTC move since FTX: CryptoQuant
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Recent data from CryptoQuant reveals that Bitcoin transfers below 1 BTC have surged to levels not seen since the collapse of the cryptocurrency exchange FTX in November 2022. On Friday, a total of 39,600 BTC were moved in such small transfers, just slightly under the 39,900 BTC recorded on November 16, 2022, days after FTX's bankruptcy. Julio Moreno, CryptoQuant’s head of research, highlighted this activity as users taking significant action amid ongoing concerns.
The surge in small transfers coincides with the ongoing suspected hack of Coldcard wallets, which was first reported in late July and remains active. Galaxy Research, affiliated with Galaxy Digital, disclosed that a recent wave of the attack resulted in an additional 207.7 BTC being stolen, bringing total estimated losses to approximately 1,367 BTC, valued at around $88.6 million, across 4,585 addresses. Alex Thorn, head of research at Galaxy Digital, emphasized that the attack continues and urged users to move funds from compromised Coldcard-generated addresses to mitigate risks.
This incident has intensified the debate over Bitcoin self-custody, a principle allowing users to manage their own funds without intermediaries. Nick Neuman, CEO of Bitcoin security firm Casa, defended self-custody by noting that its distributed nature provides users with reaction time and estimated that significantly more Bitcoin remains secure through self-custody than has been compromised. Meanwhile, some traditional finance advocates, such as Bloomberg’s Eric Balchunas, suggested that Bitcoin exchange-traded funds (ETFs) might offer safer and more convenient options, given ETF industry’s longer track record.
The debate also touched on the specific nature of the Coldcard hack, with some arguing the incident reflects a failure of a single wallet provider rather than an inherent flaw in self-custody itself. As the situation develops, researchers and authorities continue to track stolen funds, aided by user reports, underscoring ongoing concerns about wallet security and the broader implications for Bitcoin users.