Onchain investigator ZachXBT has ignited a fresh debate over crypto self-custody after declaring that today’s hardware wallets are “complete garbage” and unsuitable for signing important transactions or storing significant amounts of cryptocurrency. Instead of relying on dedicated hardware devices, he argues that experienced users may be better served by using a separate iPhone reserved exclusively for crypto activities—a recommendation that challenges one of the industry’s longest-standing security practices.
The comments, shared in a recent Telegram post, quickly spread across the crypto community, drawing both support and criticism. While ZachXBT’s remarks reflect his personal opinion rather than evidence of a new vulnerability affecting hardware wallets, they arrive as phishing campaigns, fake wallet applications, and social engineering attacks continue to drain millions of dollars from crypto holders.
ZachXBT Calls Hardware Wallets “Complete Garbage”
ZachXBT Questions the Hardware Wallet Model
Hardware wallets have long been considered the gold standard for self-custody because they keep private keys isolated from internet-connected devices. Companies such as Ledger and Trezor market their products around this core principle, arguing that offline key storage significantly reduces the risk of malware stealing crypto assets.
ZachXBT disagrees with that assessment.
In his Telegram post, he wrote that he does not recommend hardware wallets for “important tasks like signing transactions or storing funds,” calling every current solution inadequate. He instead suggested using a dedicated iPhone configured solely for crypto wallet management and transaction signing. He added a tongue-in-cheek caveat that users should only consider the setup if they are technically competent.
His criticism focuses less on cryptographic security and more on operational reliability. According to ZachXBT, today’s hardware wallet ecosystem has become increasingly complex, introducing unnecessary software updates and companion applications that can create additional friction for users.
Ledger Receives the Sharpest Criticism
Among hardware wallet manufacturers, Ledger received ZachXBT’s strongest criticism.
He described Ledger as “the worst,” arguing that frequent updates to Ledger’s companion software unnecessarily modify the interface and applications while occasionally disrupting basic wallet functions. The criticism appears directed primarily at the software experience rather than the security architecture protecting users’ private keys.
Ledger, meanwhile, continues to position hardware-based signing as one of the safest methods for protecting digital assets. The company recently rebranded Ledger Live as Ledger Wallet and released version 4.8.0 with interface improvements, security enhancements, and bug fixes as part of its ongoing software development. The company maintains that private keys never leave users’ devices during normal operation.
Importantly, ZachXBT did not claim that Ledger had suffered a new compromise or that its Secure Element technology had been broken. His argument instead centers on usability, software complexity, and the broader ecosystem surrounding hardware wallets.
Ledger Wallet Recent Update
Human Error Remains the Weakest Link
The debate highlights an increasingly important distinction in crypto security.
Modern hardware wallets are generally effective at protecting private keys from malware running on computers. However, they cannot prevent users from voluntarily revealing recovery phrases, approving malicious transactions, or downloading counterfeit software.
That reality has become increasingly apparent throughout 2026.
Earlier this year, ZachXBT reported that a crypto holder lost more than $282 million worth of Bitcoin and Litecoin in one of the largest individual crypto thefts on record. According to his investigation, the theft resulted from a hardware wallet social engineering scam rather than a technical compromise of the device itself. The attacker subsequently laundered the funds through multiple instant exchanges, converted substantial amounts into Monero, and bridged Bitcoin across several blockchain networks using Thorchain.
The incident reinforced a growing consensus among security researchers: attackers increasingly target people rather than cryptography.
Fake Apps Continue to Threaten Wallet Users
Hardware wallet owners have also become frequent targets of fake software designed to impersonate legitimate wallet applications.
In April, a fraudulent Ledger Live application briefly appeared on Apple’s App Store, successfully deceiving users into entering their recovery phrases. The scam ultimately stole at least $9.5 million in cryptocurrency from more than 50 victims before Apple removed the application.
The stolen assets included Bitcoin, Ethereum, Solana, Tron, and XRP, illustrating how social engineering remains effective even when users own legitimate hardware wallets.
The attack did not exploit Ledger’s hardware itself. Instead, victims voluntarily entered their recovery phrases into software they believed was genuine, giving attackers complete control over their wallets.
Cases like these explain why ZachXBT believes device isolation alone is no longer enough if the surrounding software ecosystem remains vulnerable to impersonation and phishing.
A fake Ledger app on the Apple App Store drained $9.5 million in crypto (Source: ZachXBT)
A Different Approach to Self-Custody
ZachXBT’s proposal of using a dedicated iPhone represents a different philosophy rather than a universally accepted best practice.
A smartphone used exclusively for crypto—with no social media, messaging, web browsing, or unnecessary applications installed—could reduce exposure to certain attack vectors associated with everyday device use. Modern iPhones also incorporate Apple’s Secure Enclave, which provides hardware-backed protection for sensitive cryptographic operations.
However, security professionals note that smartphones remain internet-connected devices and still depend on operating system integrity, application security, backup practices, and user behavior. They are not equivalent to traditional cold storage.
For most investors, hardware wallets purchased directly from manufacturers and used correctly continue to provide meaningful protection compared with leaving assets on centralized exchanges or standard software wallets.
Ultimately, ZachXBT’s comments reflect growing frustration with how hardware wallets are often marketed as complete security solutions when the greatest risks increasingly originate outside the devices themselves. Whether users choose dedicated hardware wallets or alternative self-custody methods, experts continue to emphasize the same fundamentals: never share recovery phrases, verify software authenticity, purchase devices only through official channels, and remain vigilant against phishing and social engineering attacks.
