Lost bitcoin wallet recovery specialist David Wexler, founder of the WalletRecovery.info service, conducted a comparative analysis of four high-profile hardware wallet incidents in 2026. His key conclusion: the main threat to users' funds lies not in cryptography, but in the engineering culture of manufacturers. According to the expert's assessment, Trezor, Ledger, and Bitkey can be trusted, while Coldcard and Keystone are best avoided.
Over years of practice, Wexler has never encountered a compromise of the algorithms themselves — AES, secp256k1, and BIP-39 work correctly. Everything around them breaks: a carelessly saved backup, a forgotten fallback mechanism, or a secret stored in the wrong place. That is precisely why the companies were ranked not by the size of losses, but by how much the incident exposed the vendor's internal processes.
Losses are not the main criterion
The most illustrative example is Coldcard, from which $116 million was stolen. During a migration to a new library, due to a build error, seed phrase generation ended up tied not to a hardware random number generator, but to Yasmarang — a simple software generator that MicroPython uses on microcontrollers without a hardware entropy source.
The correct code was present in the firmware, but there was no check that the device actually calls it. Weak numbers passed standard randomness tests, and hashing could not add entropy that was not there to begin with.
Any developer can make a linking mistake. The problem is different: a finished wallet build should not contain a non-cryptographic generator at all. Coinkite, the maker of Coldcard, had no build-time check, no control over the finished binary file, and no protection during device operation. The company closed the specific vulnerability, but, according to the expert, did not change the approach that gave rise to it.
Keystone did not lose a single dollar of customers' money, but received the same rating. In October, an attacker hacked a third-party website monitoring tool and gained access to customer data and the WebAuth authentication key. The latter confirms the authenticity of the device, is flashed at the factory, and cannot be changed on already-sold devices — with its help, a counterfeit can be passed off as genuine. The company destroyed 18,835 devices from its warehouse and changed the key for new batches.
Wexler named three mistakes at once, all stemming from the same culture: a secret shared across all devices was stored where the website hack could reach it, even though the verification service should store only public data; the signing device, still under the Cobo Vault brand, ran a modified Android 8.1, whereas serious wallets minimize their code; and the leak affected records from 2024, even though the company promised to delete data after 180 days.
What this means for wallet owners
Trezor and Ledger also had a tough year, but their failures did not affect key generation, transaction signing, or firmware releases. In August, ShipMonk — Trezor's delivery contractor in the US and several other countries — was hacked. Trezor deletes order data after 90 days and requires the same of its partners, so initially about 13,700 recent customers were affected. It later turned out that ShipMonk had stored roughly another 67,000 US orders from 2019–2021, even though it had confirmed their deletion in writing. In total, 80,689 buyers were affected.
Wexler is certain: a list of wallet owners with home addresses is a ready-made database for phishing and physical attacks, and Trezor should have verified the deletion rather than trusting paperwork. But the devices themselves were not involved in the leak.
Ledger's security team discovered chips in devices sold through the reseller CryptoBilis. Implants read recovery words directly from the screen during setup and sent them over LTE. The secure chip and operating system remained untouched. The attacker required physical access to each device in the supply chain, so the expert considers buying directly from the manufacturer safe.
Open code does not protect against mistakes — the Coldcard vulnerability was public. But it offers a chance that someone will find the next one before an attacker does. And an empty vulnerability history more often speaks to a company's silence than to its security.
Cryptalist analysis: The 2026 incidents shift the focus of hardware wallet evaluation from cryptographic strength to the maturity of development processes and supply chains. For institutional holders, this is a signal to revisit vendor selection criteria — the presence of an independent build audit, a public vulnerability history, and control over partners is becoming more important than brand and the size of the customer base.