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AI starts auditing hardware wallets, but new risks are also spreading into configuration files

2026-08-19 · Self-custody & Key Security / AI×Web3 Wallets

Last week’s risks were in order data and the hardware supply chain; this week they shift to two new directions: first, AI models are being used to audit firmware—and they really have found serious vulnerabilities. Second, the configuration files and even the surrounding text of enterprise Agents themselves become an attack surface—keys are not only in the wallet, but also in toolchain plaintext configurations and session memory.

According to a report by Decrypt, Swiss hardware wallet maker BitBox used state-of-the-art AI models in internal auditing and found two critical vulnerabilities in the firmware, plus a bootloader issue. One vulnerability is located in the bootloader: an attacker can trick users into installing a fake BitBoxApp via phishing, and after unlocking the device, load malicious firmware to steal Bitcoin. The other vulnerability is a memory corruption flaw that exists before the Multi-version setting; combined with a controlled computer, it enables arbitrary code execution.

BitBox stated there is no evidence that these vulnerabilities were ever exploited in the wild, and that the wallet seeds were never at risk. But the report also notes that this is another hardware wallet firmware vulnerability disclosure following a vulnerability exploit that caused losses of more than $130 million from Coldcard—again underscoring that hardware wallets are not infallible.

At the same time, another kind of risk is spreading from infrastructure into the toolchain. As reported by The Hacker News, MCP servers can expose enterprise secrets through plaintext configuration files, over-permissioned access rights, and prompt injection—and these risks typically exist before the security team gets involved.

This indicates that when an Agent has the ability to make payments, keys may be present not only in the wallet firmware, but also spread across configuration files, environment variables, and session context. If an Agent’s configuration itself is not isolated and stored in encrypted form, the attack surface expands from “can the attacker break the hardware?” to “can the attacker read the tool’s configuration directory?”

Meanwhile, institutional custody is also changing. As The Block reports, Citibank is expected to launch a Bitcoin custody service later this year as part of its newly introduced Custody+ platform. The platform also includes real-time asset services, instant settlement, liquidity tools, and AI-driven market intelligence.

According to an additional report by Decrypt, Citibank’s Custody+ allows institutional clients to hold Bitcoin and traditional assets under the same framework. This is further deployment of Citibank’s plans—disclosed in October—to launch institutional Bitcoin custody in 2026.

Together, these three news items point to a single trend: the boundary of key security is extending from “whether the device is offline” to “whether the model can be trusted to audit firmware,” “whether configuration files will leak credentials,” and “whether the custody framework can protect both on-chain and off-chain assets at the same time.” Whether it’s a hardware wallet manufacturer using AI to audit its own code, an enterprise finding that an MCP server itself becomes a point where secrets are exposed, or a traditional bank unifying Bitcoin custody with securities custody into the same architecture—one thing is clear: the technical interfaces between self-custody and custody are being redefined, and the attack surface is expanding in parallel.

Disclosure: Curated by the CoWallet team. We build threshold ECDSA MPC wallets, so we have a position on self-custody and key security topics.
https://cowallet.ai/en?pid=jingle

Sources: Decrypt (BitBox firmware vulnerability disclosure), The Hacker News (MCP server secret exposure), The Block and Decrypt (Citibank Custody+ Bitcoin custody).

#AI #Web3 #MPC #硬件钱包 #MCP

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