Ledger, one of the most popular hardware wallet manufacturers in the cryptocurrency industry, has released a new update and service that would allow users to recover their cryptocurrencies if they lose their private keys.
The new service called Ledger Recover is optional, has a price of $9.99 per month, requires to pass a KYC verification and will be available for users in the United States, Canada and Europe. Nevertheless, the community has heavily criticized Ledger for this decision.
Ledger Recover Receives Criticism from the Community
Users of the popular Nano X hardware wallet will now have the possibility to get access to Ledger Recover in order to enable a social recovery of the seed phrase. Basically, the service will encrypt the seed phrase of users in three different shards and send them to different entities. Thanks to this, if users need to get access to their funds, they can simply reconstruct the seed with the ID.
Changpeng Zhao, the CEO of Binance, one of the largest cryptocurrency exchanges in the world commented on this update proposed by Ledger:
“So the seed can leave the device now? Sounds like a different direction than “your keys never leave the device.”
The community is now extremely worried about the possibility that Ledger might have to access through a software update the private keys of users.
So the seed can leave the device now?
Sounds like a different direction than "your keys never leave the device". 🤷♂️
— CZ 🔶 Binance (@cz_binance) May 16, 2023
Ledger answer to all the criticism by saying that self-custody is at the core of their offering. Furthermore, they mentioned on Twitter that the Secret Recovery Phrase is securely generated on the device, not out of it. The company claims not to have access to it at any moment in time.
Pascal Gauthier, the CEO of Ledger explained as well that this new service is something that customers would like to see in companies such as Ledger. During a conversation with CoinDesk, he mentioned:
“You’re saying this is not what customers want. Actually, this is what future customers want. This is the way that the next hundreds of millions of people will actually onboard to crypto.”
Several other hardware wallets have been released to the market. Some of these companies include Trezor, Bitbox, Coldcard and many others. Nevertheless, Ledger remains the largest hardware wallet manufacturer and provider in the crypto industry, especially for those users that are just starting to manage virtual currencies.