In light of its new “Ledger Recovery” feature receiving backlash, crypto wallet maker Ledger is pushing back criticism for its new feature. Ledger CEO Pascal Gauthier spoke today about the new recovery feature during a Twitter space session, defending it.
“You’re saying this is not what customers want. Actually, this is what future customers want,” he said. “This is the way that the next hundreds of millions of people will actually onboard to crypto.”
Users bashing the new Ledger Recovery feature cite safety concerns. The service stores encrypted user seed phrases with third-party custodians. However, users say that this undermines Ledger’s stated commitment to privacy and security.
Users Bash New “Ledger Recovery” System
On Tuesday, Ledger confirmed speculation that it was introducing an optional, $9.99 per-month seed phrase recovery service for owners of the Nano X wallet. Ledger Recover offers a way for people to secure their speed phrases.
“When you subscribe to Ledger Recover, a pre-BIP39 version of your private key is encrypted, duplicated, and divided into three fragments, with each fragment secured by a separate company—Coincover, Ledger, and an independent backup service provider,” Ledger’s website says.
“Each of these encrypted fragments is useless on its own. When you want to get access to your wallet, 2 of the 3 parties will send fragments back to your Ledger device, reassembling them to build your private key.”
Ledger has suffered security issues in the past, such as the 2020 data breach that saw the emails of over 10,000 customers exposed. Hence, users who are bashing the new feature feel that this new Ledger Recover subscription is a new way to have all of their sensitive information revealed. Albeit, no wallets were compromised as a result of the attack, the incident left remains a topic of debate within Ledger’s tech-minded user base.
However, the Ledger CEO looks to continue defending the new recovery feature of its’ crypto wallet, as well as co-founder Nicolas Bacca.
“It’s not a backdoor at all. You stay in control. Nothing will happen without your consent on-device,” said Ledger Co-founder Nicolas Bacca, adding that the team plans to open-source its code in the future so that users can see how Ledger’s recovery service safely encrypts user data and operates securely under the hood.