Ledger Recover May 2023 event

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Overview

On 16 May 2023 hardware wallet maker Ledger announced Ledger Recover, an optional paid subscription that encrypts a user's seed, splits it into three shards and stores them with three custodians (Ledger, Coincover and EscrowTech) on hardware security modules, with ID-based recovery tied to a passport or national ID. The announcement triggered a severe backlash because the underlying firmware capability implied a device could export an encrypted seed at all, contradicting the widespread belief that a Ledger's private key could never leave the device. Ledger stressed the service was opt-in, then postponed the firmware rollout and committed to open-sourcing Recover, publishing a whitepaper and making it auditable.

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Frequently asked questions

What is Ledger Recover?

An optional paid subscription announced on 16 May 2023 that encrypts and shards a user's seed across three custodians — Ledger, Coincover and EscrowTech — allowing identity-verified recovery.

Why was it controversial?

Critics argued that for the service to work, device firmware must be able to export an encrypted seed off the device, which conflicted with Ledger's long-standing marketing that the private key never leaves the hardware.

How did Ledger respond?

Ledger emphasised the feature was opt-in and not enabled by firmware updates, postponed the controversial firmware update, and pledged to open-source the Recover code, publish a whitepaper and make it auditable.