Ledger, a popular cryptocurrency hardware wallet provider, recently introduced a new seed phrase recovery service called Ledger Recover. While the company intended to provide added protection for users’ private keys, the feature has sparked a heated debate within the crypto community. The main concern is the potential privacy and security risks associated with the service, especially considering Ledger’s past data leak.
So, what is Ledger Recover all about? The service aims to help users who misplace their seed phrase by dividing it into three encrypted fragments. These fragments are then stored by Ledger, Coinover, and a third entity. According to a Ledger spokesperson, each fragment is stored on hardware security modules (HSMs), which are essentially super-powered Ledgers. These fragments can only be decrypted on a Ledger device and are useless on their own. To use the service, users must provide a national identity card or passport.
However, not everyone is thrilled about this new feature. Several prominent crypto community members and Ledger wallet owners have taken to social media to criticize the company, calling it a “disaster waiting to happen.” The main concern is that users must trust their seed phrase with external custodians and provide sensitive identification documents. This raises red flags for many, especially since Ledger suffered a significant data leak in 2020, exposing the personal information of over 300,000 customers.
Despite the criticism, Ledger stands by its new service, stating that it is optional and secure. The company also claims that there are “lots of inaccuracies” in the criticism it has received and that there is no backdoor or security vulnerability. In response to concerns about identity theft, Ledger explains that the government ID is only one part of a complete process, which also includes full liveness detection and human review.
The company emphasizes that the new service has been tested by its Donjon team, which has previously detected breaches in several wallets, including TrustWallet. Ledger also reiterates that the service is optional and that users who do not wish to use it can simply choose not to enable it.
While the debate continues, it’s essential for users to weigh the pros and cons of Ledger Recover and make an informed decision based on their individual needs and preferences.
After all, when it comes to cryptocurrency and personal security, it’s always better to be safe than sorry.