Zack Herbert, CEO of Foundation Devices, believes self-custody is the best way for investors to protect their assets.
Speaking with Rob Nelson at TheStreet Roundtable , Herbert compared Bitcoin storage to keeping physical gold in a home safe rather than relying on an exchange or ETF.
"There’s no FDIC insurance in Bitcoin," Herbert warned. "If something goes wrong, especially if you’re using an exchange, you may be waiting a decade to get any kind of money back through bankruptcy proceedings."
Herbert pointed to Mt. Gox, the Bitcoin exchange that collapsed in 2013, leaving users still waiting for their funds more than a decade later.
"If someone steals Bitcoin, it's gone," he noted. Unlike traditional banks, there are no chargebacks, no freezing of funds, and no way to recover lost crypto once it's taken.
Many investors start by buying Bitcoin on exchanges but eventually realize the risks. FTX’s collapse in 2022 proved that exchanges can mismanage customer funds. "If an exchange is hacked, if it’s running on fractional reserves, or if a malicious employee gets access — your Bitcoin may not actually be there," Herbert said.
Herbert believes that as Bitcoin adoption grows, more people will embrace self-custody.
"We need to lower the barriers to self-custody," Herbert said. "It helps all Bitcoin investors because you don’t want too much of the supply concentrated in one place."
Foundation Devices was launched in 2020 with the mission of making Bitcoin self-custody secure and user-friendly. The company develops open-source hardware wallets, including the Passport, designed to give users full control over their digital assets.