Cryptocurrency owners are often told that keeping Bitcoin in a hardware wallet is one of the safest ways to protect it. Because these devices can be used without connecting directly to the internet, they are often described as “cold storage.”
But a recent theft involving Coldcard hardware wallets shows that offline does not always mean risk-free.
What Happened
Coldcard is a physical device that helps Bitcoin owners protect the digital credentials needed to access their funds. The device can create and store those credentials without connecting directly to the internet.
Security researchers found a weakness in some older Coldcard firmware. In certain situations, the device did not generate those credentials as randomly as users expected. That made it possible for criminals to recreate some users’ access information without stealing the physical wallet. [1]
More than $130 million in Bitcoin connected to thousands of addresses had reportedly been stolen as of early August 2026. [2]
Affected users were advised to move their remaining funds using newly generated credentials.[3] For those whose Bitcoin had already been taken, however, there was no FDIC insurance or traditional bank dispute process available to restore the funds.
The Risk of Being Your Own Bank
One of cryptocurrency’s biggest selling points is independence. Owners can hold and transfer assets without relying on a traditional financial institution.
That freedom comes with added responsibility.
When you hold your own cryptocurrency, you are also responsible for protecting the passwords, devices and software that control it. Even careful users may face risks they cannot easily see, including flaws hidden inside a product’s code.
That does not mean cryptocurrency has no value or legitimate uses. It does mean consumers should understand the trade-offs before deciding where to keep money they may need for everyday expenses, emergencies or long-term savings.
How Insured Bank Deposits Are Different
Eligible deposits at an FDIC-insured bank are protected in the event of a bank failure, generally up to $250,000 per depositor, per insured bank, for each ownership category. [4]
Traditional bank customers may also have legal protections for certain unauthorized electronic transactions, depending on the circumstances and how quickly the issue is reported.
These safeguards do not make bank accounts immune to scams, identity theft or cybercrime. They do, however, provide layers of customer support, regulatory oversight and legal protection that are generally not available when cryptocurrency is kept in a wallet controlled entirely by its owner.
Your Deposits Can Support Your Community
Security is not the only difference. Deposits can also play an active role in the local economy.
Deposits help support a bank’s broader lending activities. At Stone Bank, that can include financing for farmers purchasing equipment, small businesses investing in growth and Arkansas families buying homes.
Banking locally allows your money to support economic activity in the communities Stone Bank serves.
Choose the Right Place for Your Money
Different financial assets serve different purposes and carry different risks. Before deciding where to keep your money, consider the risks involved and what protections are available if something goes wrong.
For everyday expenses, emergency savings and other short-term needs, an FDIC-insured community bank like Stone Bank offers accessibility, customer support and protection in the event of a bank failure, subject to applicable coverage limits.
Unlike self-custodied cryptocurrency, deposits at an FDIC-insured bank come with established safeguards and a local team you can turn to for help. Choosing a community bank also keeps your money connected to the people, businesses and communities it serves.
If you have questions about where to keep your savings or how FDIC insurance works, talk with a Stone Bank banker or stop by a branch to learn more.
This information is provided for general educational purposes only and should not be considered tax, legal or investment advice. Cryptocurrency involves risk, including the possible loss of principal. FDIC insurance applies only to eligible deposit products and does not protect cryptocurrency or other non-deposit investments. Links to third-party websites are provided for convenience and are governed by those organizations’ privacy policies and security practices. Neither Stone Bank nor any of its employees assumes legal liability for the accuracy, completeness or usefulness of information obtained from third-party sources.
Sources
Franceschi-Bicchierai, Lorenzo. “Hackers steal over $130M by exploiting bug in offline hardware wallets.” TechCrunch, August 4, 2026. techcrunch.com/2026/08/04/hackers-steal-over-130-million-by-exploiting-bug-in-offline-hardware-wallets
Block Engineering. “Predictable RNG Fallback and 32-bit Reseed in Coldcard Firmware.” Block Engineering Blog. engineering.block.xyz/blog/predictable-rng-fallback-and-32-bit-reseed-in-coldcard-firmware
Coinkite. “Coldcard Mk3 Seed Generation Warning.” Coinkite Blog. blog.coinkite.com/coldcard-mk3-seed-generation-warning
Federal Deposit Insurance Corporation. “Deposit Insurance FAQs.”
fdic.gov/resources/deposit-insurance/faq