Coinkite has released a major security upgrade for its Coldcard hardware wallets aimed at strengthening seed-phrase generation by forcing users to contribute unpredictable entropy. The change is designed to ensure private keys remain hard to predict even if one of the device’s randomness sources underperforms.

In a Thursday blog post, Coinkite announced firmware 5.6.1 for the Coldcard Mk4 and Mk5, and 1.5.1Q for the Coldcard Q. The company said affected users must upgrade immediately and—critically—replace any existing seed phrases before moving funds.

Key takeaways

• Coinkite’s new firmware changes how Coldcard generates seed phrases by mixing user-supplied entropy with multiple device randomness sources.
• For newly generated wallets, the firmware requires user input via at least 65 keypresses with unpredictable timing (or equivalent die/coin-rolling actions).
• Even after upgrading, previously generated seed phrases remain vulnerable and must be replaced with new seeds before migrating funds, Coinkite says.
• The update also adds safeguards around USB handling, transaction verification timing, hardware RNG checks, and boot-time integrity testing.
• Separately, Coinspect launched Unlukey, a free tool intended to help detect wallet addresses potentially linked to weak-seed generation.

Seed phrases now rely on more user unpredictability

At the center of Coinkite’s update is a shift in seed generation. According to the company, newly generated seeds must incorporate user-supplied entropy through interactive actions, including at least 65 keypresses with intentionally unpredictable timing. Coinkite also describes alternative entropy contribution methods: 50 rolls of a six-sided die or 128 coin flips.

That input is then combined with randomness from several parts of the device, including secure elements and the wallet’s hardware random-number generator (RNG). Coinkite frames the redesign as defense-in-depth: by requiring user entropy and mixing it with internal sources, the resulting private keys should remain unpredictable even if one device entropy source fails or is otherwise compromised.

Importantly, Coinkite’s guidance is not limited to upgrading. The company warns that existing seed phrases do not become safe just because the firmware is updated; users must generate new seeds and replace the wallet’s backing recovery phrase before migrating funds.

Coinkite adds transaction and USB safeguards

The new firmware follows an earlier July 31 update that Coinkite says already corrected the seed-generation failure for newly created wallets. In its Thursday announcement, Coinkite describes the latest release as the result of additional security review over the subsequent weeks, expanding protections beyond seed generation.

One element targets how transactions are processed when a Coldcard is connected to a potentially compromised computer. Coinkite says the firmware re-verifies transactions immediately before signing—an approach intended to counter a theoretical attack involving a compromised USB port. In other words, the device aims to confirm that what it signs is still what it expects, right up to the moment it produces a signature.

Coinkite also describes new hardware RNG checks and a boot-time test designed to confirm the wallet is using the intended hardware pathway. Beyond randomness integrity, the update restricts USB downloads to the device’s most recent output and requires an encrypted session, reducing opportunities for manipulated data to be fed to the wallet during the workflow.

Finally, the firmware blocks certain Bitcoin signature hash modes by default—specifically those that could allow transaction outputs to remain modifiable under the affected conditions Coinkite references.

Impact from the Coldcard exploit remains significant

While Coinkite focuses on preventing additional exposure, the ongoing consequences of the Coldcard exploit continue to shape the security landscape. Galaxy Research reported that confirmed losses associated with the exploit reached 1,778 Bitcoin, worth about $112 million, in an Aug. 14 report. Galaxy’s assessment is linked to a broader figure compilation, and DefiLlama data aggregated in the same context ranks the Coldcard hack as the third-largest cryptocurrency exploit of 2026.

These figures underline why seed-generation hardening and secure transaction flows matter to users: even hardware-wallet protections can be undermined if randomness used for key material is weak or if signing operations can be influenced through connectivity or timing issues.

Weak-seed detection tools enter the ecosystem

Alongside firmware fixes, at least one blockchain security firm is working on software approaches to identify potential victims of weak seed generation. Coinspect revealed Unlukey, a free public tool for identifying wallet addresses that may have been generated from weak seed phrases.

In a Friday X post, Coinspect said the first iteration of Unlukey focuses on reproducing known weak seed generation patterns and checking whether public addresses appear in the affected dataset. While this does not automatically prove that any given address belongs to an exposed wallet, the tool is positioned as a way to narrow down exposure for individuals and analysts who are investigating risks related to the Coldcard incident.

Context on the underlying weakness comes from TRM Labs, which said in an analysis that a firmware bug from March 2021 weakened seed randomness on some Coldcard wallets. TRM Labs reported that the issue reduced key strength from 128 bits to 40 bits, making keys “brute-forceable without physical access.”

Coinspect’s decision to build an address-level detection method suggests the broader industry takeaway from the Coldcard episode: even when hardware vendors issue patches, secondary tooling can help the ecosystem identify which wallet outputs and addresses may be most at risk based on how seed generation was implemented in the past.

Readers should watch how users apply Coinkite’s guidance—especially the requirement to replace existing seed phrases before moving funds—and whether address-detection tools like Unlukey continue to expand coverage as more information about weak-seed generation patterns is validated.

A Reuters survey found that 63% of respondents believe President Trump and his family profiting from crypto is inappropriate, while 32% believed it was appropriate. Breaking down the respondents further, 69% of Republicans considered the profits appropriate, while an overwhelming 92% of Democrats believed they were inappropriate.

Survey Results

The nationwide survey was conducted between August 14 and August 17 by Reuters and Ipsos, and interviewed 1,166 adults. The survey has a margin of error of around three percentage points. The survey reignited the ethical debate around President Trump and his family’s crypto investments while he is in office. Understandably, views were divided by political leanings, as Republican supporters found the earnings appropriate, while Democratic Party supporters called them inappropriate.

“New Reuters/Ipsos poll: 69% of Americans, including 48% of Trump’s own voters, say his business interests are influencing his presidential decisions. His crypto ventures alone pulled in $1.4B last year.”

The poll also asked respondents about President Trump’s private commercial interests and found that 69% believed the president’s business interests have influenced his decisions. The survey only gauges public opinion about President Trump’s business interests and does not state or establish whether he violated laws or influenced government policy. The White House has also consistently rejected allegations of a conflict of interest. White House spokesperson Anna Kelly stated:

“There are no conflicts of interest. The President only acts in the best interests of the American public.”

Over $1.4 Billion in Crypto Income

President Trump’s annual financial disclosure was published in June. An analysis by Reuters revealed President Trump reported over $1.4 billion in income tied to cryptocurrency ventures in 2025. However, the figure is the reported income, not the current value of President Trump’s cryptocurrency holdings. According to a report by crypto.news, the disclosure included over $1 billion in crypto-related income, including World Liberty Financial and the Trump memecoin.

Trump-family linked companies have received nearly $800 million from World Liberty Financial, including over $520 million linked to token sales and over $250 million linked to the sale of various business interests. President Trump also reported $635 million from licensing agreements linked to the TRUMP token. The revenue went through several companies, and some of the proceeds were distributed among Trump family members and business partners.

Ethical Debate Rages On

The survey comes as lawmakers remain divided over whether crypto legislation should restrict officials and their families from investing in crypto-related businesses. The ethics provisions have become a significant stumbling block during negotiations to advance crypto legislation through Congress. Adding to the debate is the conditional approval given to World Liberty Financial to establish the World Liberty Trust Company as a national trust bank. Congressional scrutiny and conditions for the proposed trust bank will be a significant test of the separation of President Trump’s duties as President of the USA and family business interests.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Yesterday, an influencer pretended to suffer a $6 million short liquidation on bitcoin (BTC) to attract followers and clout. The stunt fizzled after some basic fact-checking.

Crypto trader Laanie posted fake evidence of a leveraged wipeout long enough to attract a few hundred thousand views, then deleted the claim a few hours later.

The engagement farmer then hosted a social audio space on X to discuss the non-existent trade, which attracted over a thousand attendees amidst a particularly bullish day for crypto markets.

Indeed, BTC was enjoying one of its steepest, single day gains of the year, rallying from $64,000 to $75,000 in under 24 hours.

A proposed Community Note on X challenged the $6 million loss. It explained that the trading display Laanie shared had Bybit’s Demo mode enabled, a subtle yet unmistakable label for the crypto exchange’s simulated trading view.

Cointelegraph is committed to providing independent, high-quality journalism across the crypto, blockchain, AI, and fintech industries.

All news, reviews, and analyses are produced with full journalistic independence and integrity. For more details on our standards and processes, please read our Editorial Policy.

Ethena price extended its weekly gain to about 65% on Aug. 21, reaching $0.142 after a $1 billion lending deal with FalconX and bullish calls from Arthur Hayes fueled demand for ENA.

Ethena price action today

According to data from crypto.news, Ethena (ENA) price traded near $0.140 at press time, up about 20% on the daily chart. The token briefly reached $0.1448 after opening the session at $0.116, extending a rally that began near $0.082 on Aug. 18.

The move carried ENA through several resistance levels in less than three days. Buyers first reclaimed $0.10, which had limited previous recovery attempts, before breaking through $0.1099, $0.1221, and $0.1343.

ENA’s 4-hour chart shows that most of the advance occurred through consecutive large green candles. The token has gained more than 70% from its Aug. 18 low, leaving little consolidation between the previous trading range and its current price.

The breakout also reversed a longer period of weakness. ENA had fallen from above $0.21 at the start of 2026 and spent much of June through mid-August between $0.07 and $0.10.

What is driving the ENA rally?

The immediate catalyst was a $1 billion secured warehouse facility announced by FalconX and Ethena.

Under the arrangement, assets backing Ethena’s USDe synthetic dollar can fund overcollateralized loans to institutional borrowers. FalconX will originate and service the loans while also managing the collateral, which will be held with qualified custodians.

Ethena will hold a first-priority security interest over the assets in the lending vehicle. The structure gives the protocol another potential source of returns beyond crypto basis trades, whose yields can weaken when demand for leveraged futures positions declines.

The $1 billion figure describes the facility’s total capacity rather than confirmed capital deployed on its first day. Interest rates, eligible collateral, borrower requirements, and the initial amount drawn have not been disclosed.

Bullish commentary from BitMEX co-founder Arthur Hayes added to the momentum. Hayes wrote in an Aug. 21 X post that an “$ENA 5 bagger is just too easy,” alongside a chart pointing toward roughly $0.50.

Hayes had previously argued that stronger US dollar liquidity could lift Bitcoin, improve derivatives basis yields, and attract capital back into USDe. On-chain reports earlier in August also linked him to purchases totaling 22.64 million ENA worth about $2 million.

Trader Daan Crypto Trades separately identified $0.14 as an important level after ENA gained more than 30%.

“Could see some resistance there. If it breaks higher we’re off to the races,” the trader said in an Aug. 21 X post.

ENA has now reached that area, making its reaction around $0.14–$0.1465 central to the next move.

Advertisement

ENA indicators warn the rally is overheated

Momentum remains strongly bullish, although the 4-hour indicators show a growing risk of short-term profit-taking.

ENA’s 4-hour Relative Strength Index reached 93.97, far above the 70 level commonly associated with overbought conditions. Its RSI moving average stood at 75.97, confirming that momentum has remained elevated across several candles rather than during one brief spike.

The Moving Average Convergence Divergence indicator also supports the uptrend. The MACD line rose to 0.0114, above the 0.0062 signal line, while the positive histogram expanded to 0.0052. The widening gap shows that buying momentum was still accelerating when the chart was captured.

Daily Aroon readings provide another bullish signal. Aroon Up stood at 100%, consistent with ENA recording a fresh high, while Aroon Down was at 64.29%. The readings favor buyers but also reflect the speed and volatility of the reversal from ENA’s earlier lows.

Overbought readings do not guarantee an immediate decline. However, an RSI near 94 means traders entering after the vertical move face a greater risk if momentum slows or early buyers begin taking profits.

ENA price targets $0.1587 if $0.1465 breaks

The daily chart places $0.1465 at the next major resistance. ENA traded just below that level after its intraday high reached approximately $0.1448.

Advertisement

A daily close above $0.1465 would confirm a breakout from the current trading range. The next technical targets would be $0.1587 and $0.1709, followed by $0.1831 if momentum remains strong.

Failure to clear $0.1465 could produce a retest of $0.1343, which previously acted as a reversal level. Lower support sits at $0.1221, followed by $0.1099 and the former breakout area around $0.0977–$0.10.

CoinGlass’ three-day liquidation heatmap shows substantial leverage concentrations below the current price. The strongest nearby clusters appear around $0.118–$0.120, with additional liquidity between $0.104 and $0.116.

A decline through $0.1343 could therefore accelerate as leveraged long positions face pressure. Holding that level would allow ENA to consolidate without breaking the short-term bullish structure.

US market context remains tied to risk appetite

ENA’s rally has also benefited from a broader recovery across the crypto market as Bitcoin moved toward multi-month highs. Rising demand for higher-risk DeFi tokens often follows strength in Bitcoin and Ether, although such assets can also record sharper losses when market sentiment reverses.

Advertisement

FalconX’s US presence gives the lending agreement an institutional connection for American markets. FalconX Bravo, an affiliate of the prime broker, is registered with the Commodity Futures Trading Commission as a swap dealer focused on crypto derivatives.

The warehouse facility does not remove the risks attached to USDe or ENA. Borrower defaults, collateral declines, custody arrangements, smart-contract exposure, changing derivatives yields, and future token unlocks could still affect the protocol and its governance token.

For now, ENA’s breakout remains intact above $0.1343. A close above $0.1465 would support another leg toward $0.1587, while a rejection combined with the extreme RSI reading would raise the probability of a pullback toward $0.1221.

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

Advertisement