Crypto hardware wallet manufacturer Ledger has unveiled ‘Ledger Recovery’, a new service allowing users to backup their recovery seed phrases.
Despite the initial announcement, the crypto community remains critical, and the formal launch has not been well-received.
The ‘Ledger Recover’ service, a subscription-based seed recovery option, is now live on Ledger Nano X, developed in collaboration with blockchain security firm Coincover. This service will soon be available on other Ledger devices.
Ledger explains that Ledger Recover is designed for users seeking added security in case they lose their Secret Recovery Phrase or cannot access it.
It encrypts users’ private keys, splitting them into three parts securely stored by three independent companies: Ledger, Coincover, and EscrowTech.
Interested Ledger users can subscribe for free during the first month, after which a monthly fee of €9.99 will apply, payable via Visa and Mastercard.
To access the service, customers need to provide a valid ID document and a selfie recording to verify their identities. Ledger notes that this ID verification process is simpler and requires less information than traditional Know Your Customer (KYC) procedures.
Know Your Customer guidelines and regulations in financial services require professionals to verify the identity, suitability, and risks involved with maintaining a business relationship with a customer. The procedures fit within the broader scope of anti-money laundering and counter terrorism financing regulations.
Pascal Gauthier, Ledger’s CEO, emphasises the service’s role in alleviating the burden of remembering seed phrases for crypto users. He states, “Ledger Recover is the solution you need to stop worrying about getting locked out of your own Ledger.”
However, the Ledger Recovery launch has faced continued criticism from users and the wider crypto community. Concerns have been raised about the security of private keys and allegations of potential backdoors, leading to the initial postponement of the service.
Commenters on various platforms have expressed dissatisfaction with the new feature, voicing concerns about potential risks to customer funds. Some even suggested they would cease using Ledger products and advised against subscribing to the service.
The Ledger Recovery service launch, despite initial reservations, continues to be a topic of debate within the crypto community.
Ledger’s Ledger Recover service appears well-intentioned in addressing the issue of lost recovery seed phrases.
Still, the crypto community’s initial concerns highlight the need for Ledger to address security and transparency issues to gain user trust.
As the service evolves and matures, resolving these concerns will be crucial for its acceptance within the cryptocurrency community.