Following the harsh criticism from the cryptocurrency community, the hardware wallet provider, Ledger, has decided to delay the release of its recently announced service, which provides the ability to recover users’ personal keys.
In a letter to users, Ledger’s CEO, Pascal Gauthier, pointed out that the company will not introduce the new feature until it publicly releases its code.
The timeline
Last week, Ledger announced the “Ledger Recover” service, which will allow users to store encrypted backups of their code (seed phrase) via three custodians.
Owners of the storage machine, Ledger, will be able to restore their private keys even if they lose or forget their seed phrases.
The ability to participate requires a “know your customer” (KYC) verification process.
Ledger almost immediately came under fire from members of the cryptocurrency community, who criticized the idea of sharing phrases with anyone other than wallet holders.
Many users criticized via social media posts or videos, noting that they felt betrayed by Ledger, who had previously said that the private keys of each Ledger wallet should never leave the device.
The threats
Some critics also highlighted potential threats posed through this service, such as breaches that private key custodians may suffer, data leaks from KYC providers, as well as the possibility of law enforcement agencies taking control of Ledger users’ data.
Others have also noted that the code for the Retrievability feature is not “open source”, so there is no way to test the security of the proposed storage mechanism.
We note at this point that unlike some competitors, Ledger does not publish all of its code, but instead has its product tested by a select group of security researchers.
The course and the importance of the service
The company learned a hard lesson, Gauthier said in his letter to users:
“We made the decision to accelerate the roadmap to open our code! We will include as much of the Ledger operating system as possible in this process, starting with the core operating system components and Ledger Recover, which will not be released until this work is complete,” he said.
Gauthier also reiterated Ledger’s view that offering key recovery services is necessary to increase cryptocurrency users, as for many people self-custody seems like a difficult task:
“The majority of cryptocurrency users today either do not own their private keys and/or compromise their private keys by using less secure forms of self-custody and cumbersome forms of storing and securing their original phrase,” Ledger said in its statement.
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