Crypto community responds to Ledger wallet secret recovery phrase service

Several members of the crypto community, including Ledger wallet owners, have taken to social media to express their displeasure following the release of Ledger’s latest feature. The newly introduced retrieval solution for its hardware crypto wallets, known as Ledger Recover, aims to provide a safeguard in case users misplace their seed phrase.

Exciting update, Ledger has a new product, Ledger Recover, launching soon:

Here’s what Ledger Recover is and what it isn’t, explained by @P3b7_ & in the thread below. pic.twitter.com/RW1w07H6pK

— Ledger (@Ledger) May 16, 2023

Ledger Recover is a subscription service that allows users to use an extra layer of security for their private keys. This service uses a technique where the user’s seed phrase is divided into three encoded fragments, each of which is sent to different external entities. Once these fragments are combined and decoded, 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 back up their secret recovery phrase. “You don’t have to use it and can continue to manage your recovery phrase yourself if that’s why you bought a Ledger,” the company explains.

Nevertheless, the concept has enraged many in the crypto community, including security specialists.

Mudit Gupta, the chief information security officer at Polygon Labs, said, “It’s a horrible idea. Do NOT enable this feature.” Gupta further expanded in his Twitter thread: “The problem here is that the encrypted key parts are sent to 3 companies and they can reconstruct your keys.”

The problem here is not splitting the key into 3 parts. That’s actually good! I may or may not personally do that 🙂

The problem here is that the encrypted key parts are sent to 3 companies and they can reconstruct your keys.

— Mudit Gupta (@Mudit__Gupta) May 16, 2023

Binance founder and CEO Changpeng Zhao chimed in with Gupta’s thread, saying, “So the seed can leave the device now? Sounds like a direction other than “your keys never leave the device”.

So the seed can now leave the device?

Sounds like a direction other than “your keys never leave the device”. ‍♂️

— CZ Binance (@cz_binance) May 16, 2023

Bitcoin (BTC) investor and podcaster Chris Dunn shared, “First, they revealed mailing address, phone numbers, and email addresses of their customers… It’s time to say goodbye to Ledger,” referring to the Ledger data breach that exposed user information in 2020. exposed.

First, they disclosed the mailing address, phone numbers, and email addresses of their customers…

And now they’ve put a backdoor in seed phrases.

It’s time to say goodbye @Ledger ✌️

— Chris Dunn (@ChrisDunnTV) May 16, 2023

Crypto investor DCinvestor also referenced Ledger’s previous data breach that left users vulnerable and vulnerable, saying “reminder Ledger leaked the name and home address of all their clients through a data breach several years ago..the absolute last thing you want their servers contain your private key.”

reminder that several years ago Ledger leaked the name and home address of all their customers through a data breach

the absolute last thing you want on their servers is your private key

— DCinvestor (@iamDCinvestor) May 16, 2023

Bitcoin investor and entrepreneur Alistair Milne shared, “Sure, you *could* use Ledger’s new ‘Recover’ service and have them […] your private keys that control your assets, as well as a copy of your ID and other personal information… but then why use a hardware wallet in the first place? His post suggested that Ledger’s latest recovery service undermines the whole point of hard wallet self-preservation.

Sure, you *could* use Ledger’s new “Recovery” service and give them the private keys that control your assets, as well as a copy of your ID and other personal information…

… but then why use a hardware wallet in the first place? pic.twitter.com/ZI39B01gFV

— Alistair Milne (@alistairmilne) May 16, 2023

Related: Ledger data leak: A ‘simple mistake’ exposed buyers of 270,000 crypto wallets

In April, Ledger launched the Ledger Nano S Plus, a specialized wallet tailored for nonfungible tokens (NFTs). The Ledger Nano S Plus is intended to improve user security and provide an enhanced experience for Web3 clients who routinely trade NFTs. This development follows Ledger’s recent integration of clear signing technology through Ledger Live, further strengthening security measures for users.

Founded in 2014, Ledger has become a prominent global player in hardware cryptocurrency wallets. The company reportedly sold an estimated 4.5 million wallets and launched six different wallet models.

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