Governments Could Subpoena Access to User Funds Held on a Ledger Device That Has Subscribed to Its New Recover Service

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Last Updated on May 23, 2023 by Bitfinsider

Three days ago, Ledger stockholder and former CEO Éric Larchevêque revealed that governments could subpoena user funds on a device that subscribes to its new Recover service.

Ledger users were alarmed, but CEO Pascal Gauthier said such a scenario is unlikely.

“The only concern really is if we get subpoenaed by a government to say now this user specifically, we would like you to retrieve the three shards etc.,” he told the What Bitcoin Did podcast.

He noted that this isn’t a problem because governments only issue subpoenas for severe crimes like terrorism or drug trafficking. “It’s not true that the average person gets subpoenaed every day.”

Ledger Recovery is an opt-in service that encrypts and splits seed phrases into three shards. Three firms hold these shards. Restoring the seed phrase requires combining the three shards on a Ledger device and passing an identity verification test. If a user stops paying $9.99 a month, they can’t access the backup.

Many Ledger owners are dubious of the optional service and worry it’s a feature they didn’t know the gadget could do. Larchevêque said he had seen customers share photos of their Ledger devices being destroyed in protest of the new functionality.

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