• Ledger, one of the most popular crypto hardware wallets manufacturers, recently released a new tool called “Ledger Recover”.
• The tool is designed to back up and store private keys but has received backlash from the community due to its process of encrypting the seed phrase in 3 shards and sending it to third-party companies.
• Ledger responded by clarifying that decryption of these shards can only occur on their device after successful identity verification and the companies never have access to the seed phrase.
Ledger Releases New Wallet Recovery Tool
Ledger, one of the most popular hardware wallet manufacturers in the cryptocurrency realm, recently unveiled a new wallet recovery tool called “Ledger Recover”. The service promises users an easy way to back up and secure their private keys.
Criticism From Security Experts
The tool has received criticism from security experts who raised concerns about its process of transferring encrypted seed phrases to third parties. Ledger employs a process where users’ seed phrases are divided into three encrypted shards and distributed amongst different entities. These pieces can be reassembled and decrypted when needed in order to reconstruct the original seed phrase.
Concerns Over Privacy
The new feature has not been met with enthusiasm from members of the crypto community due to privacy concerns over sending encrypted key parts to external corporations who could then reconstruct them for use post identity verification. Polygon Labs Chief Information Security Officer Mudit Gupta expressed his disapproval for this feature on Twitter using strong language against it: “It’s a horrendous idea, DON’T enable this feature.”
Clarifications From Ledger
In response to growing criticism, Ledger sent out an email statement explaining that decryption can only take place on their device after successful identity verification, ensuring that third-party companies never have direct access or control over user’s seed phrases.
Overall, while Ledgers wallet recovery tool was meant as an easy way for users to store their private keys securely, some security experts have raised valid points regarding its implications for user privacy which must be taken into account before enabling it.