As of the end of March 2025, the total cryptocurrency market is valued at $2.79 trillion. Yet, it routinely fights off attacks from cybercriminals, rogue insiders, and government actors who wish to take advantage of its security weaknesses. A recent debacle with OneKey, a provider of hardware wallets, serves as a reminder of the unseen dangers of updatable firmware. White hat hackers showed that OneKey’s firmware was hackable in a matter of seconds, potentially exposing the firm’s nearly one million devices. Although OneKey has since addressed the flaw, the incident highlights the fragility of crypto security and the potential for devastating attacks.

OneKey's Nightmare Scenario

2023 has not been kind to OneKey, between a large security breach. At the event, white hat hackers showed us that they could hack their hardware wallet in one second. Hackers took advantage of this loophole in order to hack a user’s entire seed phrase. With only two signed transactions, they obtained the key required to access their cryptocurrency holdings. This exploit funny enough is scary because it went around all cybersecurity warnings. Consequently, users were never made fully aware of the compromise.

OneKey has stated on Twitter that they have already patched the vulnerability which resulted in the hacking of their hardware wallet. The incident stands as a warning that even the most advanced projects must remain ever-vigilant in the crypto space. The rapidity and simplicity with which hackers took advantage of the vulnerability highlights the reality of today’s cyber attacks.

The Firmware Factor

The OneKey hack revealed a dangerous weakness in the realm of firmware—the software built directly into hardware devices. A little-known feature in the firmware could serve as a backdoor, enabling attackers to slip past the strongest security controls. While it’s updating, attackers can subtly slip in malicious lines of code into the firmware. This opens up an exploitable entry point for upcoming attacks.

The “null exploit” showed the evolution of the firmware-based attacks, bringing them to a whole new degree of sophistication. This exploit is a particularly grave danger. That’s because it’s the most subtle, underappreciated, but potent feature that can actually affect thousands of devices at a time. Plus, users typically have high levels of trust in firmware updates, which make them an excellent vector for malicious actors.

Concerns About Crypto Security

Igor Zemtsov, chief technology officer at TBCC, has long been sounding the alarm regarding the OneKey hack. He thinks it might spell disastrous consequences for the broader crypto security environment. He noted that users are never fully confident that a new firmware update can’t introduce a fatal flaw. This lack of clarity fosters an environment of fear and distrust, which may be the biggest threat to cryptocurrency adoption.

The incident raises serious alarm about what’s going on today under our current security measures. We require more rigorous testing and auditing of firmware updates to assure their added functionalities are beneficial. This only further highlights the need for user awareness and education. It empowers individuals by providing them with the knowledge necessary to take proactive steps to protect their crypto assets. The crypto community as a whole needs to come together and draw a line on these challenges, creating a more secure and resilient ecosystem in the process.