Ledger CEO says ‘sharded’ recovery seeds could be disclosed on subpoenaes

Pascal Gauthier, the CEO of Ledger, suggested on May 22 that wallet keys stored via Ledger Recover could be disclosed in the event of government sanctions.

Subpoenas could reveal user seeds

Under Ledger’s new Recover program, user wallet seeds can be “shared” and stored by three different parties. The crypto community recently raised concerns that shard holders could reveal user seeds or gain direct control of user wallets through this feature.

Gauthier countered this concern on the What Bitcoin Did podcast by stating:

“The only concern really is if we get subpoenaed by a government [that says they] would like [us] to retrieve the three shards.”

Gauthier suggested that governments usually only issue a subpoena in rare cases related to terrorism, drugs, and other criminal offenses.

He said that average individuals are not subpoenaed on a daily basis and argued that collusion between shard holders is not possible in 99% of all cases.

CEO discusses subpoena scenarios

Despite Gauthier’s assurances, others on the podcast suggested that governments could issue a subpoena could be for tax reasons, as the Internal Revenue Service (IRS) previously subpoenaed Coinbase in order to obtain customer data. The IRS has in fact subpoenaed several crypto firms, including Kraken and Circle, for user information.

Gauthier said that Coinbase provides banking services, which Ledger does not. He insisted that Ledger does not have any information that is of interest to the IRS.

Others on the podcast noted that Ledger does make use of extended public keys (x-pubs), which display user activity. Though this could be of interest to tax agencies, this feature exists separately from Ledger’s new seed recovery feature.

Gauthier also reiterated that  Ledger Recover is optional. He said that if users are not comfortable with the feature, they can use Ledger’s other storage methods.

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