Crypto Wallet Provider Ledger Delays Key-Recovery Service After Uproar
Following backlash from the cryptocurrency community, hardware wallet provider Ledger has decided to postpone the release of its key recovery feature. In a letter to users, Ledger CEO Pascal Gauthier stated that the company will not introduce the feature until the code for it has been released. Ledger also scheduled a Twitter Spaces session to discuss the issue further.
The key recovery service, called Ledger Recover, was announced last week and would allow users to store encrypted backups of their seed phrases with three custodians. This would enable users to restore their private keys in case they lost or forgot their seed phrases. However, the concept of sharing seed phrases with third parties received criticism from the community, as Ledger had previously emphasized that private keys would never leave the device.
Critics raised concerns about the potential risks associated with sharing seed phrases, such as hacks of custodians, data leaks from KYC providers, and law enforcement accessing user data. Another point of contention was the lack of open-source code for the Recover feature, which prevented auditing of the custody mechanism’s safety.
In response to the feedback, Ledger has committed to accelerating its open-sourcing roadmap. Gauthier stated that more of the Ledger code will be open-sourced, starting with core components of the operating system and Ledger Recover, which will not be released until this process is complete.
Gauthier also reiterated the importance of offering key recovery services to onboard new crypto users who may find self-custody challenging. He noted that many users either do not own their private keys or use less secure methods of self-custody, making key recovery options necessary for wider adoption of cryptocurrencies.