Ledger CTO explains addition of key-recovery option to Nano X

The new Ledger product named Recover is a deliberate ‘compromise’ that allows extracting encrypted private keys from hardware wallets. The company’s CTO, Charles Giyme, said this.

According to the executive, Ledger Recover is aimed at people who want more security than that provided by an online exchange or hot wallet. This category of users is still too inexperienced to want to own a hardware wallet, the password for which can never be recovered in the event of loss, he added.

When you don\u2019t understand the technology, this thing can be intimidating. We need to find a way to attract newcomers to ensure mass adoption of the technology, the Ledger’s CTO explained.

On 16 May 2023 the company introduced a tool that allows creating a backup copy of the seed phrase to regain access to the Nano X device.

The consent to Ledger Recover is a decision made by the user themselves. The tool splits the Secret Recovery Phrase into three fragments, which are stored in encrypted form by three different parties.

If needed the wallet owner can access the backup phrase to restore the private key through personal data confirmation. The initiative was criticised by the community and experts.

The company has tried to explain that the device remains secure despite the new functionality.

This part is really important, and it has never changed, the Ledger’s CTO assured.

Giyme reminded that Ledger Recover is not mandatory. The product does not serve as a replacement for the company\’s traditional offer.

The specialist emphasised that one does not leave the wallet for the encrypted fragments.

This part is really important, and it has never changed, the Ledger’s CTO assured.

On the day of the podcast’s release, the company\’s support service stated that the software “always allowed key extraction”. The tweet was later deleted.

Such a statement provoked a sharp reaction from users. To soften it, company representatives issued a clarification, stating that the prior post had been “taken out of context”.

Part 1 of this two-part Tweet is getting taken out of context.

To elaborate, code can be written to make it do whatever you want it to.

But with Ledger firmware, there are layers of protection and governance in place to ensure that no attacker (even internal) has the ability…

— Ledger Support (@Ledger_Support) May 17, 2023

There are layers of protection and governance in place to ensure that no attacker (even internal) can embed malware, the company assured.

In March 2023 Ledger announced the expansion of its Series C financing round amid rising sales after the FTX collapse. The maker of hardware wallets was reportedly valued at €1.3 billion.