The Globe and Mail reports in its Wednesday edition that a vulnerability in bitcoin wallets from a Toronto company has raised concerns over cryptocurrency security after hackers exploited it to steal over $140-million worth of bitcoin last week.
The Globe's Andrew Galbraith writes that the hack, which took advantage of a coding error in hardware wallets made by Coinkite, has raised doubts over the best way for holders to store their assets.
Cybersecurity analyst Eric Chennells says: "There is a lot of soul-searching and reevaluating going on. The bug was just shockingly bad."
Many users who see bitcoin as a way to be freed from the constraints of traditional financial systems have believed that self-custody -- holding their own bitcoin in a wallet, rather than on an exchange or other centralized platform -- is the safest way to store the cryptocurrency. The belief has been reinforced by notable cases like the 2019 collapse of QuadrigaCX, which resulted in user losses of at least $169-million, according to the Ontario Securities Commission.
The Canadian Investment Regulatory Organization says, "Governance, and insolvency, have demonstrated that custody arrangements are a critical point of investor vulnerability."
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