Zack Herbert, CEO of Foundation Devices, believes independence is the best way investors can protect their assets.
Speaking to Rob Nelson on TheStreet Roundtable, Herbert compared Bitcoin storage to keeping physical gold in the home rather than relying on exchanges or ETFs.
“Bitcoin does not have FDIC insurance,” Herbert warned. “In particular, if you’re using exchanges, if something goes wrong, you might be waiting ten years to get some money back through bankruptcy proceedings.”
Herbert refers to Mt. Gox, a Bitcoin exchange that collapsed in 2013, and users were waiting for funds more than a decade later.
“If someone steals Bitcoin, it’s gone,” he pointed out. Unlike traditional banks, there is no chargeback, no funds freeze, and there is no way to recover lost codes.
Many investors start by buying bitcoin on exchanges, but ultimately achieve risk. The collapse of FTX in 2022 proved that exchanges could mismanage customer funds. “If the exchange is hacked, if it is running on fractional reserves, or if it is accessed by a malicious employee, it’s possible that Bitcoin is not actually there,” Herbert said.
Herbert believes that as Bitcoin adoption grows, more people will embrace independence.
“We need to lower the barriers to independence,” Herbert said. “It helps all Bitcoin investors because we want to avoid being too focused on one place.”
Foundation Devices was launched in 2020 and has a mission to make Bitcoin independent and user-friendly. The company is developing open source hardware wallets that include passports designed to allow users to have full control over their digital assets.