Bitrabo Editorial
The CEO of Ledger, Pascal Gauthier, confirmed in a recent interview that the government could, in the event of a subpoena, access clients’ private keys through Ledger’s Recover feature. Although he specified that subpoenas are not for everyone, his comments confirmed what the crypto community already believed about Ledger devices.
Subpoenas are usually issued in extreme cases, such as targeting individuals suspected of engaging in terrorist activities and breaking anti-terrorist financing laws. Ledger is a hardware wallet manufacturer that users can use to store the private keys of several cryptocurrencies, including Bitcoin, Ethereum, and other tokens.
In the world of crypto, private keys are essential seed phrases for signing outgoing transactions. Without a private key, a user cannot confirm coin ownership. Additionally, Ledger devices are technically offline and not connected to the internet, making them more secure than hot wallets like MetaMask and exchange wallets. As a result, cold wallet devices are recommended for storing large amounts of coins. Despite being one of the most significant cold wallet providers, Ledger’s recent release of the “Recover” feature has caused a fair amount of controversy, leading to a debate.
The feature works by dividing the 24-word recovery phrase into three shards, encrypting them, and storing them in three separate locations, including an approved crypto custodian. Those who opt-in must provide their personal information as part of the know-your-customer (KYC) procedure. Ledger claims that this feature is convenient for users who have misplaced their private keys and need a quick coin recovery. However, it should be noted that this service is optional and only allows users to recover assets if they have lost their seed phrases.
Community Concerns
The cryptocurrency community is currently divided on whether the feature would provide government agencies with a backdoor access to private coins without their permission. In the interview, Gauthier assured users that their funds are safe and that their wallets did not have a backdoor. But he asserts that only if a subpoena is issued, the government has access to the private keys of users who use the Ledger Recover feature.
A court may issue a subpoena that demands the wallet holder testify in a legal proceeding or produce documents, which might comprise cryptocurrencies held and their amounts. Some crypto holders are considering other hardware providers, doubting Ledger’s new feature, which they believe undermines the principles of self-custody and decentralization that crypto and blockchain espouse.
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