The article discusses the backlash faced by Ledger over its controversial recovery service, which has raised concerns among users regarding data security, trust, and the company’s motives.
Ledger is facing intense scrutiny and opposition due to its recently launched recovery service.
This new feature, designed to assist users in retrieving lost seed phrases, has sparked widespread concern and backlash within the crypto community.
Users are apprehensive about the potential risks associated with entrusting their sensitive information to external parties.
Ledger Recover is a paid service offered at a monthly subscription fee of $9.99 USD. It aims to provide an additional layer of protection for users’ private keys by encrypting the seed phrase into three parts and distributing them among three separate custodians.
Users can combine and decrypt these parts to regain access to their original seed phrase if necessary. Notably, one of the custodians is Ledger itself, while another is Coincover.
However, the identity of the third backup service provider remains undisclosed, raising suspicions among users.
Ledger has emphasized that using the recovery service is optional, stating that customers can continue managing their own recovery phrases independently. This offering is currently limited to the Ledger Nano X device.
Why did Ledger launched this service?
Ledger’s decision to introduce this recovery service can be seen as an attempt to increase revenue and cater to users who have encountered difficulties with managing their recovery keys.
CEO Pascal Gauthier defended the product, arguing that it addresses the demand for new users of an easier onboarding process to crypto, aligning with a Web2 philosophy of simplicity and convenience. However, this perspective contradicts the ethos of “self-custody maxis,” who advocate for users holding their own keys.
Why are people agitated?
The backlash against Ledger’s recovery service stems from several legitimate concerns. Firstly, the company has experienced a major security breach in the past, with hackers compromising its customer database in 2020. This incident resulted in the theft of personal information, including email addresses, names, and home addresses. This history of vulnerability raises doubts about Ledger’s ability to safeguard user data effectively.
Another worrisome aspect is the potential risk of relying on three separate entities for key recovery. Users question what would happen if one of these parties were to fail or become compromised. The loss of one custodian could potentially lead to a permanent loss of access to a third of users’ encrypted seed phrases.
Furthermore, users are suspicious that Ledger’s ability to activate the recovery service remotely on the Nano X suggests the existence of a premeditated backdoor. This discovery adds fuel to concerns about the company’s true intentions and raises questions about the level of control users truly have over their private keys.
Ledger has generated significant controversy, casting doubt on the company’s commitment to user privacy and security. The lingering concerns about previous data breaches, reliance on third-party custodians, and the potential for undisclosed backdoors have intensified user apprehension. In light of these issues, Ledger faces an uphill battle in restoring user trust and credibility within the crypto community.
Rickie Sanchez is an article writer specializing in cryptocurrency news. Since late 2017, he has been actively investing in cryptocurrencies. He is enthusiastic about everything that has to do with crypto and he hopes that the readers of his articles in the years to come will gain a massive understanding of blockchain technology.