The former chief executive of crypto hardware wallet manufacturer Ledger has spoken out about the latest company fiasco.
On May 18, Ledger co-founder and CEO from 2014 to 2019, Éric Larchevêque, took to Reddit to express his views on what he described as a “horrible mess.”
The controversial crypto firm was lambasted this week for launching a service that gave it control over the storage of seed phrases.
Ledger is Not Trustless
A subscription-based feature called “Recover” was rolled out in a firmware update. Furthermore, the contentious feature granted the company access to customer seed phrases and demanded KYC credentials. This goes against the privacy and security that Ledger touts as its primary raison d’être.
Larchevêque commented:
“I’m devastated to come on this subreddit, that I created nine years ago, to see images of Ledger devices burning, insults and lot and lot of anger. I’m honestly to the verge of tears.”
His first step was to apologize as a co-founder for how this launch was handled. However, he defended the technology stating, “To me, all this meltdown is a total PR failure, but absolutely not a technical one.”
He added that many people believed Ledger was a trustless solution, which it is not. “Some amount of trust must be placed into Ledger to use their product,” he said before adding.
“If you don’t trust Ledger, meaning you treat your hardware manufacturer as an adversary, that can’t work at all.”
The FUD and controversy that emerged following the upgrade did not help matters, he said. The security model is the same as it was before users knew Ledger Recover existed.
Larchevêque said that the devices were still safe, there were no backdoors, and no conspiracies,
He added:
“The Recover code in the firmware is not a malicious code nor does it open a way to arbitrary extract the seed.”
Don’t Forget the Data Breach
It is not the first time Ledger has been embroiled in a controversial PR disaster. And it is not the first time company executives have defended the product at the expense of their customers.
In April, Ledger was criticized for promoting a necklace product as part of the Ledger Nano X OnChain crypto wallet. The firm completely overlooked the fact that physically carrying a hardware wallet around your neck goes against every security principle in the book.
Furthermore, Ledger suffered a series of security breaches in 2020, leading to huge leaks of customer data. A wave of phishing and SIM swap attacks followed as data from as many as 270,000 users was leaked online. Some victims even suffered death threats, and many lost crypto assets as a result.
The company offered no compensation to victims and refused to acknowledge their grievances despite being sued several times.
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