Part of the CustodyStress archive of observed Bitcoin custody incidents
CS-01407
The Coldcard's encrypted backup on the card was unreadable.
ConstrainedCase description
A 2025 recovery case involved a Coldcard hardware wallet whose seed phrase had been stored on a microSD card kept inside the device. The microSD card had physically failed due to moisture exposure. The device was in working condition and the holder had the PIN. The Coldcard's encrypted backup on the card was unreadable. A data recovery laboratory was able to read 94% of the card's sectors, including the Coldcard backup file's header. However, Coldcard's backup encryption uses AES-256 with a passphrase-derived key—without the backup passphrase, which the holder had not retained, the recovered data could not be decrypted. The holder still had functional device access but no seed phrase backup.
Custody context
| Stress condition | Seed phrase unavailable |
| Custody system | Hardware wallet (single key) |
| Outcome | Constrained |
| Documentation | Unknown |
| Year observed | 2025 |
| Country | International |
What this illustrates
Without the seed phrase, the wallet couldn't be restored — on any device, ever. Whether full access was ultimately possible is unclear, but significant delay or outside intervention was involved.
Outcome interpretation
Access remained possible, but only with delay, dependence, or significant difficulty.
Source
Privately Reported
Evidence type
News article
Related cases involving seed phrase unavailable
146 cases involve seed phrase unavailable
274 cases involve hardware wallet (single key)
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This archive documents observed custody survivability failures. It does not attempt to document all Bitcoin losses or security incidents.
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Framework references
Where Bitcoin Custody Intersects Legal and Fiduciary Authority
Where custody creates gaps in estate planning, fiduciary duty, and professional responsibility.
Professional Scope Boundary Matrix
What each professional or product covers, what they do not, and where gaps form between them.
The Independent Assessment Layer in Bitcoin Custody
How independent diagnostic layers emerge when multiple parties depend on shared infrastructure.
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