Ledger said that the subscription to the Ledger Recovery service is voluntary, and the company is stripped of any ability to remotely manage and update devices.
The latest update to the Ledger Nano X hardware crypto wallet allows users to subscribe to the Ledger Recovery tool, which gives them the ability to recover the original phrase after undergoing identity verification.
Ledger representatives assure that the Ledger Recovery service breaks down the original phrase into three encrypted parts, using Shamir Secret Sharing, and sends those pieces to three third-party companies for storage.
The parts can only be combined and decrypted after the user has verified their identity on the Ledger.
“Third-party companies do not have access to your original phrase, it is not stored in the cloud, and the backups themselves are encrypted, fragmented and decrypted only directly in your Ledger,” the company assures.
Ledger CEO Pascal Gauthier tweeted that rumors of the company creating a backdoor for attackers were unfounded.
The update is not mandatory, the CEO assured, and no one is stopping customers from staying on previous versions of the firmware, providing data storage on their own.
“We have no control over Ledger devices and are not able to run automatic updates. Only you can use the functions of the device, and no one else can enter your pin code,” Pascal Gauthier wrote.
Ledger customers were so scared by the news of the firmware update that they actively criticized the company in social networks and the open space for abuse.
The most exalted members of the crypto community urged Ledger Nano owners to stop using the company’s services and hardware cryptocurrencies in general, as Ledger’s innovation could open the door to potential identity theft.
In April, U.S. business magazine Fortune generated a ranking of the Crypto 40, which included companies that “have the most significant impact on the crypto industry.”
Ledger was named the leader in the category of hardware wallet providers.