One of the most popular cryptocurrency wallet makers may be leaking customer data to authorities

Ledger CEO Pascal Gauthier has admitted that the authorities can access the private keys of users of hardware crypto wallets that will be connected to the Ledger Recover service. He spoke about this in the What Bitcoin Did podcast. At the same time, Gauthier emphasized that governments will be able to access cryptocurrency wallets only by court order.

The Ledger Recover service is a voluntary feature that allows users to split a seed phrase into three parts and send it to three third-party companies for storage. In case of loss of the seed phrase, it can be recovered by combining these three fragments on the Ledger device and passing the identity verification. Currently, Ledger Recover costs $ 9.99 per month.

The new service caused a wave of criticism, as users were outraged that not only the owner of the hardware device could have access to the data.

Ledger shareholder and former CEO Eric Larszewek said that governments may demand access to the funds of users who subscribe to the new service. «Cryptocurrency holders are scared that their assets may be blocked,» he said.

However, Pascal Gauthier said that such a scenario is unlikely. «The only thing that really worries us is if the government sends a court request and says something like: here is a specific user, we want you to recover three fragments of his key,» the top manager explained.

According to Gauthier, governments issue such subpoenas only for serious reasons, such as in situations related to terrorism or drugs. The Ledger CEO noted that «the average person does not receive subpoenas every day.»

Earlier, Ledger admitted that they could always access users' private keys through special firmware installed on hardware crypto wallets. The main complaint of cryptocurrency owners was that the company positioned the device as a way to store assets autonomously. By adding the ability to upload keys, even in encrypted form, Ledger set a precedent. According to critics, the new tool reduces the security of the device, making it vulnerable to fraudsters.