Ledger is a prominent manufacturer of hardware wallets in the crypto market. According to the needs of the consumers, they have several different wallet models accessible. Even though hardware wallets are regarded as one of the safest methods of storing cryptocurrency, a new tool has been made available that may put them in danger.
Ledger introduces “Ledger Recover”
A new program from Ledger called “Ledger Recover” enables users to subscribe to and back up their private keys. The technique used by the service involves distributing the user’s seed phrase in three encrypted shards to outside businesses. The original seed phrase may be recreated using these bits after they have been put back together and decoded.
The hardware wallet manufacturer had anticipated a certain response to the new functionality, but it has not been satisfied.
Ledger’s KYC registration makes users anxious
The necessity for Know Your Customer (KYC) registration to use the “Recover” feature is one of the main sources of dispute. Many crypto aficionados respect their privacy and believe that this demand conflicts with the values they hold dear.
Users who register for KYC must provide a photo of a valid government-issued ID. Users in the EU, U.K., Canada, and the U.S. are now subject to this registration requirement, and the subscription service is only accessible for Ledger Nano X devices.
The crypto community has harshly criticized Ledger’s choice to adopt this upgrade, particularly because it undermines the hardware wallet’s primary function of protecting the user’s seed phrases.
Ledger’s history of security flaws, which have caused customers to lose faith in the company, has led to this reaction.
In July 2020 and December 2020, Ledger had security breaches that resulted in the loss of 270,000 Ledger owners’ physical addresses and subsequent extortion attempts against affected customers.
Even though Ledger insisted that there was no connection between the hacked data and the money in users’ wallets, the occurrences heightened the public’s suspicion.