The Ugly Tradeoffs of Ledger’s New Recovery Service - Ep. 494

Ledger, the crypto industry’s leading hardware wallet manufacturer, rolled out a new recovery feature this month that caused an uproar. The recovery service has dangerous implications for crypto self-custody, says Foundation Devices Head of Content “Seth For Privacy.” He joins the show to discuss the downsides of closed-source code and the security risks that come with compromising for mainstream adoption.

Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Stitcher, Castbox, Google Podcasts, TuneIn, Amazon Music, or on your favorite podcast platform.
Show highlights:

how Ledger Recover works and why it caused an outrage in the crypto community

why the fact that Ledger’s code is not open-source could be considered a problem

what the concerns are about handing over additional data to Ledger

how darknet markets have always existed for fake ID verifications and how it relates to Ledger’s new feature

some of Ledger’s previous security lapses

why introducing a trusted third party undermines one of Bitcoin’s most central tenets

whether Ledger’s move is a “net good for society,” and whether people actually want a service like this in a hardware wallet

whether something will go wrong with Ledger in the future

Thank you to our sponsors!

Crypto.com

Railgun DAO

Stader Labs

Guest
Seth for Privacy, blogger and head of content at Foundation Devices

Blog

Foundation Devices

Twitter thread on the logistics and risks of the Ledger recovery process

Links

Ledger CTO Twitter thread on Ledger Recover

CoinDesk: Ledger Bats Back Criticism of New Wallet Recovery Service, CoinDesk

Unchained: ‘Backdoor’ for Seed Phrases? Ledger’s New Recovery Feature Spooks Users

Ledger Recover webpage

Haseeb Qureshi’s thread on the Ledger controversy

Past Ledger security issues

CoinDesk: Crypto Wallet Maker Ledger Loses 1M Email Addresses in Data Theft

Cointelegraph: Ledger data leak: A ‘simple mistake’ exposed 270K crypto wallet buyers

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