Custody, Risk, and Trust: An Interview With Sable CEO Andrew Stephens

Andrew Stephens has spent his career at the intersection of traditional finance and digital assets. As CEO of Sable Venture Capital, he oversees a firm that custodies and manages client capital across crypto, equities, real estate, and hard assets. We sat down with him to talk about the part of the business clients ask about most but understand least: how digital assets are actually kept safe, and how to tell a serious platform from a dangerous one. The conversation has been edited for length and clarity.

On What Custody Really Means

Let’s start simple. When a client sends Bitcoin to a platform, what are they actually trusting it to do?

“They’re trusting us to protect a secret — that’s really what it comes down to. Bitcoin doesn’t move; the coins sit on the blockchain permanently. What moves is the authority to spend them, and that authority is a private key. So when a client deposits, they’re trusting that we can keep that key out of the hands of attackers while never losing our own access to it. Those two failure modes — theft and loss — pull in opposite directions, and the entire craft of custody is solving both at once.”

People picture a vault with coins in it. The truth is stranger: there are no coins to steal, only keys. Get the key management right and everything else follows.

How does Sable actually secure those keys?

“The large majority of client assets are in cold storage — keys on devices that never touch the internet — spread across geographically separated locations, and secured so that no single person or location can move funds alone. We use multi-signature approvals, so it takes a quorum of independent keys to authorize anything. On top of that, holdings carry institutional insurance and everything is encrypted in transit and at rest. None of this is exotic anymore; it’s just the standard of care that a serious custodian owes clients. We describe the architecture openly on our security page because clients should be able to check it.”

On Learning From the 2022 Failures

A lot of people lost money when platforms like FTX and Celsius collapsed. What was the real lesson there?

“That those weren’t market failures — they were custody failures. Bitcoin didn’t do anything to those customers; the companies holding their coins did. Funds were commingled, lent out, or simply gone, and customers found out they owned an IOU, not an asset. The lesson the whole industry absorbed is the old phrase, ‘not your keys, not your coins.’ For a platform, the corollary is that you have to be able to prove, not just assert, that client assets are segregated, secured, and actually there. If a platform can’t answer that in writing, that’s your answer.”

How should an ordinary investor evaluate whether a platform is trustworthy?

“Ask hard questions and insist on written answers. Who is the qualified custodian? What share of assets is in cold storage? What does the insurance actually cover, and who underwrites it? Is there proof of reserves from an independent auditor? Is the leadership team named and verifiable? A legitimate operation can answer all of that plainly. And do the simplest test of all — deposit a small amount and withdraw it. A platform that makes it easy to leave has told you something no marketing brochure can. We actually walk clients through this same framework; it’s the honest way to do business.”

I tell people to diligence us the way we’d want to be diligenced. If a competitor won’t answer the same questions we will, that gap is the whole story.

On Risk and Volatility

Digital assets are famously volatile. How do you think about managing that for clients?

“Volatility is the price of admission, and you manage it primarily through sizing, not prediction. Nobody reliably calls tops and bottoms — anyone who says otherwise is selling something. What you can control is how much is at stake and how the risk is structured. The math of drawdowns is unforgiving: a fifty-percent loss needs a hundred-percent gain to recover. So our whole orientation is toward not taking losses we can’t recover from, applying the same rules at three in the morning as we do midday. Removing emotion from the loop is half the battle, and that’s something a disciplined process does better than a person ever will.”

Sable offers fixed-term products with stated returns. How do you respond to the skepticism that any advertised yield in crypto deserves?

“Honestly? That skepticism is healthy, and people should apply it to us too. The right question about any yield is always, where does it come from? If a platform can’t explain the source of a return in plain language, the return isn’t real. We’re transparent about our structure and our rates and fees precisely because the alternative — smooth, guaranteed, unexplained returns — is the classic signature of a fraud. A credible return has an explainable source and disclosed risks. We’d rather lose a prospect to over-disclosure than win one by glossing over the risks.”

On Transparency and the Road Ahead

Regulation of digital-asset custody is clearly evolving. Is that good or bad for a firm like yours?

“Good, on balance — clarity is good for anyone operating in good faith. As the rules around qualified custody get formalized, the platforms built on real regulated custody get validated and the ones cutting corners get exposed. We’d rather compete in a market where the standards are explicit. It raises the floor for clients, and a higher floor is exactly what this industry needed after the last cycle.”

Last question. What’s the one thing you wish every new digital-asset investor understood?

“That where you hold matters as much as what you hold. People spend all their energy on which asset to buy and almost none on custody and counterparty risk — and yet that’s where the largest, most permanent losses have always come from. Get the boring things right: understand who holds your keys, size your positions so a bad outcome is survivable, and diligence anyone you trust with your money. Do that, and you’ve already avoided the mistakes that hurt most people.”

Our thanks to Andrew Stephens for his time. To learn more about how Sable custodies and manages client assets, see how it works, our security practices, and the investor overview. For the concepts referenced above, read our explainers on how Bitcoin custody works, evaluating a digital-asset platform, and risk-management concepts.

Frequently Asked Questions