- Ledger unveils a new wallet recovery tool.
- The Ledger Recover tool received backlash from the community.
- Some security experts raised concerns highlighting the transfer of encrypted seed phrases to third parties.
Ledger is one of the most popular hardware wallet manufacturers in the cryptocurrency realm. They have numerous wallet models available, depending on the requirements of the users. Even though hardware wallets are touted as one of the safest ways to store cryptocurrencies, a new tool has been released that could jeopardize them.
Ledger has released a new tool called “Ledger Recover” that will allow users to subscribe and back up their private keys. The service employs a process where the user’s seed phrase is divided into three encrypted shards and distributed to third-party companies. When these pieces are reassembled and decrypted, they can be utilized to reconstruct the original seed phrase.
However, the new feature has not received the reaction that was expected by the hardware wallet manufacturer.
The new tool has received backlash from many users as well as security experts. Polygon Labs Chief Information Security Officer Mudit Gupta tweeted about it. He highlighted the main problem with the idea: sending the encrypted [key] parts to three corporations where they can reconstruct the keys.
In a response sent via email to The Block, Ledger clarified that the decryption of the three shards can only occur on the Ledger device after the user has successfully verified their identity. They also clarified that these companies never have access to the seed phrase as it is not stored in the cloud.
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