Ledger has underscored that its identification checks, a prerequisite for its private key recovery tool, stand in stark contrast to traditional KYC checks, as they necessitate considerably less information.
The esteemed hardware wallet provider, Ledger, is forging ahead with the introduction of its cloud-based private key recovery solution, despite grappling with considerable scrutiny from the cryptocurrency community.
Scheduled for launch on October 24th, Ledger Recover, an ID-based private key recovery service for Ledger’s hardware wallet, was formally announced via X (formerly known as Twitter). This release coincides with Ledger’s finalization of the open-source code for Ledger Recover, which is now available on GitHub.
Delivered in collaboration with blockchain protection platform Coincover, Ledger’s seed phrase recovery solution operates as a subscription-based service, enabling users to securely back up their Secret Recovery Phrase (SRP). The SRP, a unique collection of 24 words, serves as the safeguard for private keys and facilitates access to one’s cryptocurrency assets.
A spokesperson representing Ledger informed Cointelegraph that a Ledger wallet encrypts a “sequence of random 1s and 0s” from which the SRP is derived. The encrypted numerical sequence is then fragmented into three parts, each of which contributes to the backup of the SRP.
The spokesperson further clarified, “Ledger Recover exclusively interacts with these fragments, never with your SRP in its readable form.” Ledger ensures the distribution of encrypted SRP fragments through end-to-end encrypted and authenticated channels provided by three independent entities, including Ledger, Coincover, and EscrowTech. The spokesperson emphasized, “Each fragment on its own consists of meaningless sets of random numbers, and no single entity possesses access to the entire backup. This design ensures the highest level of security, eliminating any single point of failure.”
Ledger Recover has been tailored to cater to users who seek to fortify their resilience by offering an additional layer of security in the event of SRP loss or destruction. Charles Guillemet, Ledger’s Chief Technology Officer, underscored that Ledger Recover is an optional recovery service, stating, “If you choose not to utilize the service, don’t worry — it will always remain 100% optional. You can continue to use your Ledger as you have in the past, and nothing will change.”
Initially, Ledger Recover is compatible with Ledger Nano X, with integration for Ledger Stax and Ledger Nano S Plus anticipated in the near future. Notably, Ledger Nano S is not compatible with the Ledger Recover solution, as per the Ledger Recover FAQ.
Ledger Recover’s availability is initially limited to individuals holding passports or identity cards in the United States, Canada, the United Kingdom, and the European Union. Ledger has plans to expand its coverage to more countries and extend support for additional forms of identification.
Ledger emphatically stated that the identity verification process for Ledger Recover differs significantly from the Know Your Customer (KYC) checks conducted by centralized cryptocurrency exchanges. They clarified that their recovery system only necessitates a “valid, government-issued document,” with the spokesperson remarking, “Identity verification inherently requires far less information compared to KYC, as KYC often involves not only ID verification but also the collection of financial data, checks for criminal records, and citizenship verification, among other things.”
As per social media reports, the Ledger Recovery service will be available at a monthly cost of $9.99, or an annual fee of approximately $120. Non-payment of the subscription will result in suspension, with users having the option to reactivate their subscription within the next nine months, subject to an administration fee of 50 EUR, as detailed in the Ledger Recover FAQ.
The launch of Ledger Recover follows a hiatus in May 2023, when Ledger temporarily suspended its recovery service due to a wave of community backlash. Pascal Gauthier, CEO of Ledger, subsequently affirmed that the product’s release would align with the publication of its open-source code.
Trezor, Ledger’s primary competitor, has chosen to abstain from introducing a cloud-based private key recovery solution and instead adopted a physical backup approach. In mid-October 2023, Trezor unveiled its own physical seed phrase recovery tool, Trezor Keep Metal, as an alternative to the cloud-based approach.
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