Post
Topic
Board Hardware wallets
Merits 27 from 4 users
Re: Ledger Recovery - Send your (encrypted) recovery phrase to 3rd parties entities
by
Meuserna
on 26/02/2025, 21:16:54 UTC
⭐ Merited by LoyceV (24) ,HeRetiK (1) ,examplens (1) ,dkbit98 (1)
I strongly encourage you to read more about the Bybit hack.

This will happen to Ledger.  It's just a matter of time.

Quote
North Korean hackers managed to pull off the biggest hack in history by planting malicious code into the infrastructure of Safe—a crypto wallet provider used by Bybit, and one that has long marketed itself as impenetrable.

https://decrypt.co/307866/how-bybit-hacked-1-4-billion-ethereum

Now, to put that in context for Ledger:

Ledger created an API to enable key extraction from Ledger hardware devices over the internet.  It's baked in to the Ledger firmware.  That will get hacked.  It's a question of when, not if.

Quote
"yes a firmware update can extract the seed"
-- murzika, Ledger Co-Founder, Former CEO, and Former Chairman
https://np.reddit.com/r/CryptoCurrency/comments...

Ledger holds the master key for their key extraction scheme, which includes access to all keys stored on Ledger's servers and other companies' servers, using Ledger Recover.  That will get hacked.  It's a question of when, not if.

Quote
"The bombshell here is the explicit confirmation that Ledger themselves hold the master decryption key for all Ledger Recover users."

-- @sethforprivacy
https://twitter.com/sethforprivacy/status/1671532787294191618

And, making matters worse, Ledger's codebase has been hacked.

Quote
How a Single Phishing Link Unleashed Chaos on Crypto:  "Ledger has confirmed the attack began because “a former Ledger employee fell victim to a phishing attack.”

-- Decrypt, December 14th, 2023
https://decrypt.co/209838/single-phishing-link-unleashed-chaos-on-crypto

For hardware wallet users, the lesson to be learned is this:

Never use a hardware wallet that allows internet access to the device.  No exceptions.  Your keys need to be where hackers cannot reach them over the internet.

I assume everybody here understands how hardware wallets generate transaction signatures without accessing the internet, but if you're not clear on how that works, I'd encourage you to learn about it.  Understanding how this stuff works helps to keep you safe.

Ledger's code enables key extraction from the device over the internet.  Ledger devices can't be trusted.  Ledger lied about it, every step of the way.  Ledger can't be trusted.

Never use a hardware wallet that allows internet access to the device.  No exceptions.