Foundation CEO pushes local manufacturing after $100M Ledger breach

A supply chain breach that cost victims an estimated $86 million to $100 million has become the centerpiece of a new industry argument: hardware wallet makers should build locally, and Foundation Devices CEO Zach Herbert is making that case personally.

Journalist Laura Shin, in a November 13, 2026 statement, attributed to Herbert the push to minimize supply chain vulnerabilities through domestic manufacturing. Herbert's argument extends beyond geography. He also advocates physical tamper detection and open-source designs, which he says are critical for confirming that a device is what it claims to be.

What happened at Ledger?

The October 2026 incident that sharpened the debate involved Ledger. Tampered hardware sold through resellers was tied to the theft of funds estimated between $86 million and $100 million, according to the reporting on the breach.

The breach exposed a structural weakness in how much of the hardware wallet industry reaches customers. Many manufacturers rely on overseas production and third-party reseller networks to scale output and expand their buyer base. Each intermediary adds a point where a device can be altered before it reaches the end user.

How Foundation practices what it preaches

Foundation Devices has positioned its Passport hardware wallet line, including the newer Passport Prime model, as a working example of the approach Herbert advocates.

The company assembles every Passport device in the United States, inside an ITAR-certified facility. Foundation says that certification allows for strong validation of its supply chain.

Each device ships with active tamper circuitry — hardware designed to respond when someone attempts physical interference. Foundation pairs that with open-source software designs, letting independent parties verify what the code does.

There is a commercial dimension to the argument. Herbert is effectively describing his own product strategy as the industry standard he would like competitors to adopt. That does not invalidate the reasoning, but readers should weigh that the person making the case also sells the solution.

Foundation's stance also runs counter to the industry's broader direction. Overseas manufacturing and reseller channels remain the dominant model for scaling production and distribution.

Could the market split in two?

Herbert has sketched a forecast for where the hardware wallet market may head: segmentation into two distinct streams.

The first stream would consist of high-security domestic products, built with features designed to earn user trust. Herbert has pointed specifically to capabilities like device bricking — a mechanism where a wallet renders itself unusable if it detects tampering.

The second stream would be DIY options, frequently used in multisig arrangements. Multisig, short for multisignature, requires more than one key to approve a transaction. If one device is compromised, an attacker still cannot move funds alone.

What should buyers and builders do now?

For consumers, the practical takeaway is that device provenance now deserves the same scrutiny as device features. Three steps follow directly from Herbert's argument:

• Buy directly from the manufacturer rather than through a reseller
• Check whether the device offers tamper detection
• Verify whether the software design is open-source

For manufacturers, the pressure points are cost and scale. Domestic assembly and factory-direct shipping give a company tighter control over its supply chain, but they cut against the overseas production and reseller channels that much of the industry depends on to reach buyers.

What comes next

Following a breach of this scale, provenance verification — where a device was assembled, who handled it, and whether its code is auditable — is likely to become a competitive differentiator rather than a niche concern. How quickly the industry's reseller-dependent players respond, and whether Herbert's two-stream market materializes, will shape hardware wallet procurement over the coming cycle.