Crypto community reacts to Ledger wallet passphrase service

Many in the crypto community think Ledger's latest seed phrase recovery feature is a bad idea.

Several members of the crypto community, including owners of Ledger wallets, have taken to social media to express their displeasure following the release of Ledger's latest feature. The newly introduced recovery solution for its hardware crypto wallets, known as Ledger Recover, aims to offer protection in case users misplace their seed phrase.

Exciting update, Ledger has a new product, Ledger Recover, launching soon: https://t.co/nT1VHnnSYz

Here's what Ledger Recover is and isn't, explained by @P3b7_ and in the thread below. pic.twitter.com/RW1w07H6pK

Ledger Recover is a subscription service that allows users to use an additional layer of protection for their private keys. This service uses a technique in which the user's seed phrase is split into three encrypted fragments, each sent to different external entities. Once these fragments are combined and decrypted, they can be used to reconstruct the original seed phrase.

The wallet provider shared that Ledger Recover is an optional subscription for users who want to back up their secret recovery phrase. "You don't have to use it, and you can continue to manage your recovery phrase yourself if that's why you bought a ledger," the company explained.

Nevertheless, the concept enraged many in the crypto community, including security specialists.

Mudit Gupta, Chief Information Security Officer at Polygon Labs, shared, "That's a horrible idea, DO NOT turn this feature ON." Gupta elaborated further in his Twitter thread that "[t]he problem here is that the encrypted key parts are sent to 3 companies and they can recover...