Chinese AI Models Are Defending Bitcoin Wallets Because US Models Won't

Galaxy Digital's Alex Thorn joins Austin, Ram, and Chris on the Coldcard firmware bug that's drained over $100M from cold storage — plus why the researchers chasing the next hack are stuck on Chinese AI models.

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A firmware bug that has sat inside Coldcard hardware wallets since 2021 let hackers drain more than $100 million in bitcoin — an estimated 1,600 to 2,000 BTC — from cold storage. The stolen coins had been dormant for about four years on average, so the victims are long-term holders, not speculators.

Alex Thorn, head of research at Galaxy Digital and host of the Galaxy Brains podcast, has traced the exploit in real time, mapping three confirmed waves of theft and a possible fourth. He joins Austin Campbell, Ram Ahluwalia, and Chris Perkins to work out whether ordinary holders should self-custody at all — and why the researchers racing to catch the next exploit are stuck using Chinese AI models, because US frontier models refuse the security work.

The conversation covers the collapse of an AI hedge fund whose assets fell from $45 billion to $10 billion before a distressed sale to Ken Griffin's Citadel, whether Citadel timed the fire sale or simply had the cash, the multisig setups that came through the hack intact, and the Fed's divided vote to hold rates as Kevin Warsh pushes to make it more accountable.