Ledger’s recent unveiling of a seed phrase recovery feature has ignited a wave of backlash within the crypto sphere.
A slew of crypto enthusiasts, particularly Ledger wallet users, have vented their displeasure on social media over Ledger’s latest addition. The feature in question, dubbed Ledger Recover, is a retrieval mechanism designed for its hardware crypto wallets, intending to provide a safety net should users misplace their seed phrase.
Ledger Recover is a subscription-based service offering users an added security layer for their private keys. It operates by dividing the user’s seed phrase into three encrypted fragments, which are then dispatched to separate external entities. The original seed phrase can be restored once these parts are decrypted and merged.
According to Ledger, this Recover feature is a voluntary subscription for those wishing to secure a backup for their private recovery phrase. The firm underscored that users aren’t obligated to utilize it and can continue managing their recovery phrase independently if that aligns with their reasons for purchasing a Ledger.
Regardless, this concept has infuriated numerous crypto community members, including security professionals.
Mudit Gupta, Polygon Labs’ Chief Information Security Officer, described it as a “terrible idea,” vehemently advising against its use. Gupta elaborated on Twitter, stating the issue lies in the distribution of encrypted key fragments to three corporations with potential to reconstruct the keys.
Changpeng Zhao, Binance’s founder and CEO, responded to Gupta’s thread, questioning the new direction, seemingly contradictory to the principle of private keys remaining exclusive to the device.
Chris Dunn, a Bitcoin investor and podcaster, commented on the situation by referring to Ledger’s infamous data leak in 2020, which disclosed customers’ contact information. He criticized Ledger for essentially creating a backdoor into seed phrases and suggested it was time to part ways with the company.
DCinvestor, a crypto investor, echoed these sentiments, reminding people of Ledger’s data breach, which laid bare customer information. He emphasized the potential risk associated with storing private keys on their servers.
Bitcoin investor and entrepreneur Alistair Milne posed a rhetorical question on why users would opt for a hardware wallet if they were willing to entrust Ledger with their private keys and personal information, hinting that the recovery service defied the self-custody principle intrinsic to hardware wallets.
In other news, Ledger rolled out the Ledger Nano S Plus in April, a wallet engineered specifically for non-fungible tokens (NFTs). The Nano S Plus strives to augment user safety while optimizing the experience for Web3 customers regularly dealing in NFTs. This innovation trails Ledger’s recent inclusion of “clear signing” technology via Ledger Live, further amplifying its user security measures.
Founded in 2014, Ledger has carved a reputation as a key international force in the hardware cryptocurrency wallet industry. The company has reportedly distributed approximately 4.5 million wallets and launched six unique wallet models.