Ledger Alternatives for Bitcoin: What the Thefts Change

Key takeaways

• Ledger confirmed it found an unauthorized hardware implant in devices tied to its authorized reseller CryptoBilis, and it suspended that reseller's sales.
• Researchers cited by eSecurity Planet say modified Ledger Nano X units carried extra circuitry that sends recovery phrases over an eSIM, and Ledger's Genuine Check cannot detect this if the original Secure Element is intact.
• BlockSec traced the Coldcard thefts to a firmware migration that sent seed generation through a deterministic software fallback, so seeds made under the flawed firmware stay compromised after an update.
• Cointelegraph's five Ledger alternatives are crypto ETFs, passkey wallets, multisig, centralized exchanges and paper wallets, and each carries its own trade-offs.
• Cointelegraph's combined theft figure of more than $200 million for Ledger and Coldcard is higher than the separate estimates in other reports, and it comes without a breakdown.

Why Ledger alternatives are back in the conversation

Cointelegraph Magazine published a piece on Oct. 21 listing five alternatives to a Ledger for storing Bitcoin: crypto ETFs, passkey-based wallets, multisig setups, centralized exchanges and paper wallets. It appeared after two separate hardware-wallet failures in recent months. Cointelegraph says more than $200 million in crypto was stolen from tampered Ledger devices and from Coldcards whose generated seed was not truly random. It gives no split between the two, and that combined figure is higher than the separate estimates in other reports.

For traders, the useful question is which failure each alternative actually protects against. The two incidents had different causes, and the five options address them unevenly.

What went wrong with Ledger and Coldcard

According to eSecurity Planet's Oct. 14 report, Ledger confirmed it had found an unauthorized hardware implant while investigating thefts. The company tied the confirmed cases to an authorized reseller, CryptoBilis, and suspended its sales. Ledger customers in Southeast Asia prompted the investigation, and Ledger said on Oct. 9 that it had paused the reseller's sales. Citing BleepingComputer, the report says the point at which the devices were tampered with is still unclear.

Researchers who examined modified Nano X units reportedly found extra circuitry that captures recovery phrases and sends them out over an eSIM. Ledger's Genuine Check cannot catch this if the original Secure Element is untouched. Ledger has not confirmed a total loss. Blockchain tracking firms and industry outlets put user losses above $86 million.

The Coldcard case is a software flaw. BlockSec reported that funds were swept in several waves starting July 30. Its on-chain floor, as of Aug. 7, was about 1,405 BTC (roughly $91 million at a $64,700 BTC price) taken from about 4,925 addresses. Reconciliation with victims in private channels put the figure as high as 2,055 BTC, or about $133 million. BlockSec says those numbers differ by method and are not independently confirmed here.

BlockSec attributes the cause to a build and integration error. A 2021 firmware migration sent seed generation through a function that fell back to a deterministic software generator instead of the hardware random number generator. BlockSec estimates this cut the search space for seed recovery to about 40 bits on older models and about 72 bits on newer ones. A firmware update does not repair a seed that was already generated, so affected users must move funds to a new seed.

How the five options compare

Cointelegraph is clear that an ETF is not technically a way to store Bitcoin. A shareholder holds a claim on the fund's net asset value in dollars. The listed risks are a centralized provider, third-party custody, fees and possible gaps between share price and the underlying market price. Ophelia Snyder of 21Shares told the magazine that exchange-traded products suit most people most of the time for tax, estate-planning and security reasons, and she named loss of onchain use and issuer exposure as the costs. PlanB, creator of the stock-to-flow model, moved his BTC into ETFs in 2025 and said after the incidents that he has zero regrets.

Passkey wallets such as Coinbase's Smart Wallet, Clave and Infinex remove the seed phrase, but Cointelegraph notes that a lost device or passkey can still cause trouble. It advises checking whether recovery depends on a third party. Adam Back questioned the Smart Wallet in June 2024, asking what happens if a passkey is hacked and saying it sounded like a hosted wallet. Readers who want to see a seedless design in practice can look at our guide to setting up Zengo.

Multisig spreads risk across signers. In a common 2-of-3 setup, any two of three keys approve a transaction. Casa's version pairs a hardware wallet, a phone and a key Casa holds. The drawbacks Cointelegraph lists are signer availability, code or configuration flaws in smart-contract wallets, the chance that an attacker compromises enough signers, and slower transfers. Casa CEO Nick Neuman said earlier this month that users should spread risk across multiple providers.

Centralized exchanges and paper wallets come with the weakest recommendations. Proof-of-reserves reports do not show a company's full financial health, and under the OECD Crypto-Asset Reporting Framework exchanges ask for identity, residency or tax details, with account restrictions or suspended withdrawals possible for non-compliance. Paper wallets can leak the key before printing if the computer is compromised, the generator is malicious or the randomness is weak. Cointelegraph concludes they are not a better option for most users.

Our read for traders

This section is analysis, not reporting. The two incidents show that a hardware wallet's security depends on its supply chain and on the quality of its randomness, not only on the Secure Element. Ledger's Genuine Check missing a modification is a reminder that a passed verification can overstate safety. The Coldcard flaw means even honest use of correct-looking firmware offered no protection for seeds that were already generated.

The alternatives do not remove risk. They exchange one kind for another. ETFs and exchanges swap self-custody risk for counterparty and compliance risk. Passkeys and Casa-style multisig depend on a provider's recovery design. Paper wallets bring back the randomness problem. Multisig spread across independent signers and vendors is the one option that addresses both a single compromised device and a single bad seed, at the cost of convenience. Cointelegraph also cites a rising number of $5 wrench attacks in France, one every 2.5 days this year, as a sign that holding keys yourself carries physical risk too.

On price, XPERTRAX data shows Bitcoin at $82,148, down 1.11% over 24 hours. We would not tie that move to these storage stories. The more relevant point is that the dollar value of coins at risk rises with price, so custody choices deserve attention when positions are large. Anyone holding on a Ledger or Coldcard should check whether their device or seed falls into the affected groups, and our overview of crypto risk management covers how to size and separate holdings.

Sources

• 5 alternatives to ledger to store your bitcoin (cointelegraph.com)
• Ledger Confirms Hardware Wallet Tampering Amid $86M Crypto Theft Reports (esecurityplanet.com)
• COLDCARD Incident: When a Wallet's "Random" Seed Wasn't Random (blocksec.com)