Ledger admits to criticism from crypto community

After massive criticism of the new Recover feature, hardware wallet manufacturer Ledger is bowing to community pressure - for now.

To avert greater damage, the company has now given in to the pressure. In a letter to the community, Ledger announced that the feature would not go live for now. The company wants to expose the code first. Ledger caused a stir in the crypto scene with its new Recover feature. Ledger Recover split the seed phrase into three parts for encrypted storage in the cloud. A data breach in the summer of 2020 had already done considerable reputational damage to Ledger's confidence.

Only a short time before this, Ledger had CEO Pascal Gauthier confirmed in a podcast that the seedphrases of "Ledger Recover" could theoretically be handed over to the government.

That would be possible if corresponding investors were associated with "serious acts or drug and terrorist crimes," he said. "It is not true that the average person is subpoenaed every day," Gauthier said.

Additional turmoil arose when the company deleted a tweet from its support department on May 17. It read, "Technically, it has always been possible to write firmware that facilitates key extraction." To what extent government officials have the right to collect seed phrases remains to be seen.