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Small Bitcoin transfers hit highest level since FTX collapse amid Coldcard exploit

Small Bitcoin transfers hit highest level since FTX collapse amid Coldcard exploit

CryptoQuant said exchange inflows below 10 BTC rose to 7,300 BTC on July 31 as a Coldcard wallet flaw linked to roughly $89 million in losses pushed smaller holders to move funds.

BTC

Fact Check
The primary Galaxy Research X post (@glxyresearch) directly states the 1,367.05 BTC across 4,585 addresses figure, matching the claim exactly. CoinDesk, crypto.news, and cryptobriefing independently corroborate this and the weak/predictable RNG root cause tied to a March 2021 Coldcard firmware bug. The LCX/CryptoQuant report confirms sub-1 BTC transfers reached their highest level since shortly after the FTX collapse (Nov 2022), with rising exchange inflows. All key elements of the claim are supported by authoritative and corroborating sources.
Summary

Bitcoin holders, especially smaller ones, moved more coins to exchanges after a vulnerability in Coldcard hardware wallets was linked to about $88.6 million to $89 million in observed losses. CryptoQuant said exchange deposits from transfers below 10 BTC climbed to 7,300 BTC on July 31, the highest since Feb. 6, while transfers below 1 BTC reached their largest scale since the period after the FTX collapse. Galaxy Research said observed losses reached 1,367.05 BTC across 4,585 addresses, while other on-chain estimates put the toll at 1,000-1,300 BTC across more than 1,000 addresses. The fallout is also shifting toward possible legal action against Coinkite, the company behind Coldcard, as users and lawyers examine product-liability and class-action claims tied to losses of more than 1,300 BTC.

Terms & Concepts
  • seed phrases: A sequence of words that can restore a crypto wallet and the private keys controlling its funds.
  • self-custody: Holding crypto by controlling the private keys directly instead of relying on an exchange or other intermediary.
  • exchange inflows: Crypto transferred onto trading platforms, often tracked as a sign of changing custody, repositioning, or potential selling pressure.