Crypto Custody Stocks in Focus as Hardware Wallet Owners Look for an Exit

"People have spent years building their wallet setups. Asking them to move every asset and relearn everything is a real barrier," Zach Herbert, Foundation's cofounder and chief executive, said in the company's announcement. "Legacy Mode lets them keep what they've built and put it on an open source foundation."

"We reimplemented the interfaces that Ledger's open source apps use to talk to BOLOS, its operating system," said Ken Carpenter, Foundation's cofounder and chief technology officer. "That includes cryptographic operations, screen rendering, and USB communication. We can compile the existing app code for Passport and run it on KeyOS, without running Ledger's proprietary operating system."

Foundation says it is not affiliated with Ledger. Ledger stopped selling the Nano S in 2022 and said last year updates would end, since its 320 KB of memory leaves "very little room for anything else," chief technology officer Charles Guillemet told The Block.

Then Coldcard. A firmware flaw shipped in March 2021 left seed phrases guessable. More than $116 million has been drained.

"This bug was sitting out there for five years. So everyone missed it," Tanguma said in an interview in August. "There's a single point of failure whether it's Coinbase or yourself."