Ledger key recovery service paused amid backlash, will open-source code

May 24, 2023 Coin Telegraph

Ledger CEO Pascal Gauthier says the past week has been a “humbling experience” and apologized for the firm’s “miscommunication.”

Hardware wallet company Ledger is postponing the launch of Ledger Recover following an intense week of criticism from the crypto community.

In a May 23 Twitter Spaces joined by over 13,000 users, Ledger chairman and CEO Pascal Gauthier said it has been a “humbling experience” and a hard lesson in communication:

“This experience has been very humbling. We miscommunicated on the launch of this product; it was not our intention to take people by surprise. So because of that, we understand the community’s direction and apologize for the miscommunication.”

Gauthier revealed that in response to concerns, the firm would be accelerating its plans to open-source more of its codebase. It will start with core components of its operating system and Ledger Recover, which he stated: “won’t be released until this work is complete.”

Screenshot of tweet from Pascal Gauthier as part of a thread discussing their new plans. Source: Twitter

Charles Guillemet, the chief technology officer of Ledger, said that over the coming days, a white paper on the Recover Protocol would become open source along with technical blog posts to “explain the principles of Recover” and more detailed explanations of how the process works.

“It's going to be very easy and clear for every single cryptography and security expert to have a look at the protocol to get more guarantees and understand how it works.”

Guillemet noted this would also allow developers to build their own backup provider for the seed phrase shards rather than using the one offered by Ledger.

“This has always been something important for Ledger, but this recent event showed how important it is for the community and this is why we decided to prioritize this open-sourcing process,” he added.

Ledger’s mission is, and will always be, to provide our users with the right tools to own their digital value securely.

We have decided to accelerate our open-sourcing roadmap to bring more verifiability to everything we do.

A thread pic.twitter.com/Dv0jBCM4Ys
— Charles Guillemet (@P3b7_) May 23, 2023

Ledger recently told Cointelegraph that it would “continue to open source more and more of our code until we reach a similar level as the Raspberry Pi.”

Ledger found itself in a PR nightmare after revealing plans on May 16 to introduce a key recovery tool called Ledger Recover. The firmware update would allow users that lost their private seed phrase to get it back via an optional feature.

I want to address the feedback over Ledger Recover, the way it was communicated, and share our path forward. Read my letter and join our town hall with our leadership team to learn more.

https://t.co/2hlPrMwzaN pic.twitter.com/juVBOpWeeG
— Pascal Gauthier @Ledger (@_pgauthier) May 23, 2023

The firm faced backlash from some members of the crypto community who believed that this would add a “backdoor” for a user’s private keys to be removed from the device.

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Centralized Intermediaries

The Ledger CEO said that until people begin using decentralized technology, control over assets and data will remain in the hands of the big tech giants and centralized intermediaries.

The rise of decentralized services and hardware security wallets means that we no longer need to rely on intermediaries to manage our financial assets and data, according to CEO Pascal Gauthier of hardware wallet Ledger, who has urged people to take on more responsibility.

Speaking to Cointelegraph at Surfin’ Bitcoin 2022 on Aug. 25, Gauthier said that the recent collapse of centralized exchanges has showcased why investors shouldn’t rely on intermediaries to manage their digital assets.

While most actors are well intended, Gauthier said “the [crypto] industry is too young”, the current state of the economy is “under stress” and if necessary, intermediaries will continue to prevent investors from accessing their holdings in times of need, citing the now bankrupt Celsius as a textbook example:

“Don’t trust your coins and your private keys to anyone because you don’t know what they’re going to do with it.”

Gauthier admitted the bad news added “fuel to [their] business,” but reinforced that people need to “move their coins before it’s too late.” Though Gauthier unfortunately noted that people in crypto often need to “get burned a little bit” before learning the hard way.

But Gauthier also believes that the transition from Web2 to Web3 is taking its time because today’s internet users are content with the speed and efficiency of Web2 services:

“A lot of people are still in Web2 [...] because they want to stay in the matrix where they’re being controlled because it’s easier, it’s you know just click yes yes yes and then someone else is going to deal with your problems. It’s all good and well but actually I don’t think this is how you [become] free [...] taking responsibility is how you become free.”

Gauthier added that most people in today’s society see crypto as just another way to make easy money. However, they fail to understand that it can “give them control on their assets” and provide them “financial freedom.”

Ledger was founded in 2014, and is a leader in security hardware wallet infrastructure through the use of their built in ‘Secure Element and a proprietary operating system’, which is designed to protect digital assets. As of Jun. 2021, Ledger had sold over 3 million hardware wallets.

In addition to Ledger’s security products, Gauthier said the company has also taken an educative approach to help everyday people understand what Web3 is trying to do:

“We spend a lot [...] of our money [...] on building content and education [to try] educate people, legislators, regulators [...] for people to understand what all of this means, why it’s an opportunity, why freedom is being challenged today [...] in the current society [and] why [this] technology needs to evolve in order [...] to make people more free than what they are today.”

Moving forward, Gauthier said he’s excited to see how blockchain tech unfolds and what crypto applications will bring in mass adoption. Taking a 20 year horizon, Gauthier added that “what we are going to see in 20 years are somethings that we can’t really imagine yet.”

Pascal Gauthier