After $38M Coldcard Hack, Ledger CTO Warns on Bitcoin Wallet Security

A wallet believed to be nearly impossible to break got broken anyway, and roughly $38 million in Bitcoin vanished in under half an hour. That real-world jolt is now shaping how the industry talks about Bitcoin wallet security, with Ledger CTO Charles Guillemet urging users not to treat multisig wallets as an automatic upgrade just because a rival device failed.

Key takeaways

• Ledger CTO Charles Guillemet warns Bitcoin holders against rushing into multisig setups after a Coldcard hardware wallet flaw let an attacker drain roughly 594 BTC, worth about $38 million, from around 500 wallets in a 25-minute sweep, according to CoinDesk.
• Guillemet argues that adding complexity to a wallet setup can introduce new risks rather than eliminate old ones.
• He points to Bitcoin Miniscript as a way to build advanced spending rules, including inheritance plans and time-locked recovery keys, without the full complexity of traditional multisig.
• Ledger’s “clear signing” feature and its support for the cryptographic MuSig2 standard are presented as practical alternatives already built into its hardware wallets.
• For most people, Guillemet says, a properly backed-up single-signature hardware wallet is still the most sensible option.

Ledger CTO Warns Against Rushing Into Multisig Wallets

Guillemet’s message is straightforward: don’t let a headline dictate your entire security setup. He has urged Bitcoin users not to rush into adopting multisig wallets simply because a competing device suffered a breach, arguing that the reflex to “add more signatures” can backfire.

What Happened With Coldcard

The incident behind this warning is significant. According to CoinDesk, an attacker exploited a flaw in how certain Coldcard hardware wallets generated their cryptographic keys, sweeping about 594 BTC — worth roughly $38 million at the time — out of around 500 separate single-signature wallets in a window of just 25 minutes. The theft moved more than 1,300 transaction chunks across 500 wallets before consolidating the bulk of the funds into a single address.

The root cause, according to a technical report from Block’s Bitcoin engineering team cited by CoinDesk, traced back to firmware 4.0.0, shipped by Coinkite in March 2021. A build setting caused affected Coldcard Mk3 devices to skip their hardware randomness generator, falling back to a predictable software-based method that used non-secret chip data, like a serial number, as its seed. Coinkite reportedly warned users who generated seeds on Mk3 devices running firmware 4.0.1 or later, while stating that its Mk4, Q and Mk5 models appeared unaffected. Despite the scale of the theft, Bitcoin’s market price showed little reaction, trading above $64,000 in the hours that followed.

Risks of Complex Multisig Setups

That episode is exactly why Guillemet is cautioning against a knee-jerk shift toward multisig. According to him, making a wallet setup more sophisticated can actually introduce additional risks rather than remove them. More signing devices, more backup seeds, and more coordination steps all create more places for something to go wrong, whether that’s user error, lost hardware, or a bug buried in firmware nobody audited closely enough.

Ledger’s Alternatives: Bitcoin Miniscript and MuSig2

Instead of defaulting to multisig, Guillemet points to two technical tools already available to self-custody users: Miniscript and MuSig2. Both aim to deliver stronger protection without the operational overhead that made the Coldcard-style setup risky in the first place.

How Bitcoin Miniscript Works

Guillemet argues that Bitcoin users relying on self-custody should look at Miniscript as a middle ground — advanced enough to matter, but not so complicated that it becomes its own liability. Bitcoin Miniscript lets users define sophisticated spending conditions, including inheritance rules, time-locked recovery keys, and 2-of-3 authorization policies, all encoded directly into how the wallet can spend its funds. For developers, he added, Miniscript also makes it considerably easier to build custom wallet software from scratch.

To illustrate the point, Guillemet said he built a functional Bitcoin wallet supporting these kinds of advanced spending policies in just a few hours, with help from the AI assistant Claude. He said the confidence to test that wallet on the Bitcoin mainnet came specifically from Ledger’s clear-signing approach, which let him verify exactly what the device was authorizing before committing any funds.

Clear Signing and MuSig2 Support

Ledger’s implementation enables what Guillemet calls “clear signing” for every spending path a Miniscript wallet supports, meaning a user can see and confirm precisely what they’re approving on the hardware device itself rather than trusting a black box. This kind of visibility is central to how Ledger frames hardware wallet security as something users should be able to verify, not just assume.

He also flagged MuSig2, a cryptographic alternative to traditional script-based multisig that combines multiple keys into a single signature rather than stacking separate approval steps. Guillemet said that, to his knowledge, Ledger hardware wallets are currently the only devices supporting MuSig2, positioning it as one of the more distinctive Ledger multisig alternatives on the market right now.

Security Decisions Should Reflect Individual Threat Models

Even while promoting these alternatives, Guillemet was careful not to dismiss multisig outright — he acknowledged it remains the right choice for certain users with genuinely complex security needs. The point he stressed instead is that the decision shouldn’t be reactive. Security choices, he argued, should be based on a person’s actual threat model rather than a panicked response to the latest breach making headlines.

That framing matters well beyond this one incident. Every time a widely used wallet suffers a flaw, the instinctive market reaction is to assume more complexity equals more safety. Guillemet’s argument flips that assumption: complexity without a matching threat model just creates more surface area for mistakes, whether from firmware bugs, mismanaged backup seeds, or coordination failures between multiple signing devices.

For the vast majority of Bitcoin holders, Guillemet’s practical advice is comparatively simple. A properly backed-up single-signature hardware wallet, he said, remains the most practical choice for most people — not because it’s flashy, but because it matches the threat level most everyday users actually face.

FAQ

Why does Ledger CTO advise caution with multisig wallets?

Following the Coldcard security incident, Ledger CTO Charles Guillemet warned that complex multisig setups can introduce additional risks and shouldn’t be adopted simply as a reaction to a competitor’s breach.

What is Bitcoin Miniscript and why is it recommended?

Bitcoin Miniscript allows users to define advanced spending policies, such as inheritance rules and time-locked recovery keys, giving self-custody holders stronger protection without the full complexity of traditional multisig.

What unique features do Ledger hardware wallets offer for security?

Ledger wallets support clear signing to verify every spending path before approval, and according to Guillemet, they are currently the only devices supporting the cryptographic MuSig2 standard, an alternative to script-based multisig.

How should users decide their Bitcoin wallet security approach?

Guillemet says the decision should be based on an individual’s specific threat model rather than reactions to recent headlines. For most people, a properly backed-up single-signature hardware wallet remains the most practical option.

Article produced with the assistance of artificial intelligence and reviewed by the editorial team.