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Ledger Faces Backlash and Delays Key-Recovery Service…till when?

Hardware wallet provider Ledger has faced significant backlash from the crypto community over its planned key recovery feature.

Rudy Fares

Rudy Fares

May 24, 2023 12:46 PM

Ledger Faces Backlash and Delays Key-Recovery Service…till when?

Hardware wallet provider Ledger has faced significant backlash from the crypto community over its planned key recovery feature. Following the outcry, the company has decided to delay the release of the controversial service and pledged to open-source the Ledger Recover code before its introduction. This article examines the concerns raised by the community and Ledger’s response to address them.

Ledger recently announced its new service called Ledger Recover, which allows users to store encrypted backups of their seed phrases with three custodians. This feature aims to enable users to restore their private keys in case of seed phrase loss or forgetfulness. However, the idea of sharing seed phrases with custodians sparked immediate criticism within the crypto community.

Community Backlash and Concerns

Members of the cryptocurrency community expressed their discontent with Ledger’s key-recovery service. They emphasized the importance of self-custody and raised concerns about the potential risks associated with sharing seed phrases. Critics highlighted the risks of custodian hacks, data leaks from KYC providers, and potential government intervention. Additionally, the lack of open-source code for auditing the proposed custody mechanism raised further doubts about the service’s security.

Ledger’s Response and Commitment to Transparency

In response to the community backlash, Ledger CEO Pascal Gauthier addressed the concerns in a letter to users. He acknowledged the importance of user feedback and announced that Ledger would delay the introduction of the key-recovery feature until the code is open-sourced. Gauthier also committed to accelerating the company’s open sourcing roadmap, starting with core components of the operating system and Ledger Recover.

Is Key Recovery from Ledger important?

Gauthier reiterated the company’s belief that key recovery services play a crucial role in onboarding new crypto users who may find self-custody challenging. While Ledger aims to provide such services, the recent controversy has highlighted the need for transparent and secure solutions that align with the community’s expectations.

Rudy Fares
Article By

Rudy Fares

Equity Trader, Financial Consultant, Musician and Blockchain Aficionado. I spend my time doing Technical and Fundamental Analyses for Stocks, Currencies, Commodities and Cryptocurrencies.

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