May 23, 2023 at 11:16 GMTModified date: May 23, 2023 at 11:16 GMT
May 23, 2023 at 11:16 GMT

Ledger CEO concedes government subpoena fears

Ledger’s CEO has seemingly confirmed that the seed phrases of those who select the Recover upgrade could actually be given to officials under a subpoena.

Ledger CEO concedes government subpoena fears

Ledger CEO Pascal Gauthier has seemingly confirmed that the seed phrases of those who choose to add the new Ledger Recover upgrade could actually be handed over to senior officials if a user is hit with a subpoena.

The new update has caused significant uproar in the past week amongst the crypto community.

If a user hits yes on the optional Recover, the seed phrase is split into encrypted pieces, or ‘shards’, which are then held in three locations, including Ledger, Coincover and an independent back-up provider.

While speaking on the What Bitcoin Did podcast, CEO Gauthier conceded that while the new Recover could mean government officials seizing seed phrases, it would be in the instances of crimes such as terrorism, narcotics, or other serious offences.

“The only concern really is if we get subpoenaed by a government to say now this user specifically, we would like you to retrieve the three shards etc,” Gauthier said.

He added: “It’s not true that the average person gets subpoenaed every day.”

Gauthier stated that Ledger Recover is optional and that if users are not OK with it, they can use the company’s other storage solutions.

Ledger controversy

Last week, Ledger attempted to explain its new Recover service to allay security fears. It tweeted: “The Ledger Recover service is an opt-in feature. That means that the shards won’t be encrypted and stored on Hardware Security Modules unless you sign up for Ledger Recover. If you don’t sign up for this feature, nothing will change for you.

“If you choose to subscribe, Ledger Recover encrypts a version of your private key and splits it into three fragments (using Shamir Secret Sharing) – all of this happens on the Secure Element chip, so your Secret Recovery Phrase is not at risk.”

However, it still didn’t go down too well.

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