The Ontario suit against Coinkite and its co-founders alleges that a 2021 firmware error made recovery phrases predictable. Losses from the theft that began July 30 are put at $114 million to more than $140 million.
Coinkite, the maker of Coldcard bitcoin hardware wallets, and its co-founders Rodolfo Novak and Peter D. Gray face a proposed class action in Ontario Superior Court over a major theft from self-custody wallets.
The claim, filed Sept. 11 and made public this week, alleges that a firmware build error dating to March 2021 caused devices to generate recovery phrases from MicroPython's Yasmarang pseudo-random number generator instead of the hardware random-number generator they were meant to use. It alleges that attackers began draining affected wallets on July 30, 2026, taking about 594 bitcoin in the first 25 minutes, and that the founders knew of the flaw no later than May 2025.
None of the allegations has been tested in court. The class has not been certified.
The plaintiff and the claims
The named plaintiff is Amir Reza Naderi of Los Angeles, who says he lost 1.2294 bitcoin on Aug. 6. The suit, file number CV-26-00018158-0000, brings claims under Ontario's Consumer Protection Act and Sale of Goods Act, as well as negligence and breach of contract. Ontario court records show only a statement of claim filed so far, according to the BTC Breakdown newsletter's review of the docket.
Estimates of total losses vary. Coinkite shipped new firmware in August after a theft put at $114 million, and the suit puts losses above $140 million. One law firm's analysis in August counted about 1,816 bitcoin taken from more than 5,200 addresses. Updating the firmware does not make an already-compromised wallet safe; affected users would need to move funds to a new wallet.
Why it matters beyond Coldcard
Hardware wallets are sold on a simple promise: keys generated offline, by a device, that no one else can predict. The suit goes to the heart of that promise, and its knowledge allegation raises the stakes. If a court finds a wallet maker liable for a firmware defect, it could set a precedent for the industry.
The case is also a reminder that self-custody shifts risk rather than eliminating it. Holders trade exchange counterparty risk for dependence on the hardware maker's code.
What to watch
Coinkite's response, the certification motion and whether other suits follow in the U.S. or elsewhere.