Ledger Unveils Cloud-Based Recovery Service Amid Crypto Controversy

In this post:

  • Ledger’s cloud recovery boosts key security.
  • Ledger’s ID verification differs from KYC.
  • Trezor sticks to physical backups.

Ledger, a leading name in the hardware wallet industry, has officially announced the launch of Ledger Recover, an ID-based private key recovery service designed for Ledger hardware wallet users. This move comes in the wake of considerable controversy within the cryptocurrency community. The release coincides with Ledger’s finalization of the open-source code for Ledger Recover on GitHub.

Provided in partnership with blockchain protection platform Coincover, Ledger Recover offers a paid subscription service that allows users to safeguard their Secret Recovery Phrase (SRP). The SRP is a unique list of 24 words crucial for backing up private keys and providing access to crypto assets.

A spokesperson from Ledger clarified that the Ledger wallet encrypts a random string of 1s and 0s, from which the SRP is generated. This encrypted string is then divided into three pieces to create a backup SRP. Crucially, Ledger Recover only interacts with these fragments and never accesses the SRP in its readable format. The secure distribution of these encrypted SRP fragments occurs through end-to-end encrypted and authenticated channels involving three independent companies: Ledger, Coincover, and EscrowTech. The spokesperson emphasized that this approach eliminates a single point of failure and offers the highest level of security.

Ledger optional cloud key recovery & global expansion

Ledger Recover has been developed for users who seek an enhanced layer of resilience in case their SRP is ever lost or destroyed. Charles Guillemet, Ledger’s Chief Technology Officer, emphasized that Ledger Recover is entirely optional, stating,

“If you don’t wish to use the service, no worries — it’ll always be 100% optional. You can simply continue using your Ledger as you did previously — nothing will change.”

Initially, Ledger Recover is compatible with Ledger Nano X, with integration for Ledger Stax and Ledger Nano S Plus expected in the near future. It’s worth noting that this solution is not compatible with Ledger Nano S, as detailed in the Ledger Recover FAQ.

At its launch, Ledger Recover will be available to passport or identity card holders in the United States, Canada, the United Kingdom, and the European Union. The company has plans to expand its coverage to more countries and support additional types of documents.

Ledger has been keen to clarify that the identity verification process required for Ledger Recover is distinct from the Know Your Customer (KYC) checks conducted by centralized crypto exchanges. The company emphasized that its recovery system only necessitates a valid, government-issued document. Unlike KYC, which can encompass various forms of data collection, identity verification for Ledger Recover involves significantly less information.

According to information gathered from social media posts, Ledger will offer the Ledger Recovery service for $9.99 per month or approximately $120 per year. Users who fail to maintain their subscriptions will have them suspended but can reactivate within the next nine months, subject to an administration fee of 50 EUR along with any outstanding balance.

This rollout comes after Ledger temporarily halted its recovery service in response to community backlash. Ledger CEO Pascal Gauthier announced that the service would resume once its open-source code became available.

It is notable that Ledger’s largest competitor, Trezor, has chosen to avoid introducing a cloud-based private key recovery solution. Instead, Trezor has opted for a physical backup solution, launching its own physical seed phrase recovery tool, Trezor Keep Metal.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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