Several members of the cryptocurrency community, including Ledger wallet owners, have taken to social media to air their distress following the release of Ledger's latest feature. A newly launched hardware-encrypted wallet retrieval solution called Ledger Recover aims to pro vide a measure of protection in case users misplace their seed phrases.
Ledger Recover is a subscription service that allows users to use an extra layer of protection for their private keys. The service employs a technique that divides a user's mnemonic into three encrypted segments, each of which is sent to a different external entity. Once these pieces are combined and decrypted, they can be used to reconstruct the original seed phrase.
The wallet provider shared that Ledger Recover is an optional subscription for users who want to backup their secret seed phrase. “You don't have to use it, if that's why you bought the Ledger, you can continue to manage the seed phrase yourself, ” the company explained.
However, the concept has angered many in the crypto community, including security experts. Mudit Gupta, chief information security officer at Polygon Labs, shared, "This is a terrible idea, don't enable this feature." Gupta further expanded in his t witter thread, saying, "The problem here is that the encryption key part is sent to 3 companies and they can rebuild your key." Binance founder and CEO Changpeng Zhao chimed in on Gupta's post: “So the seed can now leave the device? Sounds like a different direction than 'your keys never leave the device'."
“First, they exposed customers' mailing addresses, phone numbers, and email addresses,” shared investor and podcaster Chris Dunn, referring to the 2020 Ledger data breach that exposed user information. “Now they have a backdoor phrase in the seed. Time to say goodbye to Ledger.” Crypto investor DCinvestor also referred to previous data breaches, saying: “As a reminder, a few years ago, Ledger leaked all of its customers' names and home addresses through a data breach. The last thing you want on their servers is your private key."
Bitcoin investor and entrepreneur Alistair Milne shared, "Of course, you *could* use Ledger's new 'recovery' service and give them […] the private keys to the assets you control along with your ID and other personal information . . but why hardware wallets in the first place? His post suggests that Ledger's latest recovery service defeats the whole point of self-regulation via hard wallets. In April, Ledger launched the Ledger Nano S Plus, a wallet tailored for non-fungible tokens. The Ledger Nano S Plus aims to enhance user security and provide a better experience for Web3 customers who frequently trade NFTs. This development follows Ledger's recent integration of “clear signature” technology through Ledger Live, further strengthening user security measures.
Founded in 2014, Ledger has become a global name in hardware cryptocurrency wallets. The company has reportedly sold around 4.5 million wallets and launched six different wallet models.
