a cautionary lesson in trust

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a viewer

Well-known member
Sep 30, 2020
Though crypto isn't a popular theme at SN, this story shows the abuses a company commits when the company plays coy and speaks with a forked tongue. Can't state whether this is the fault of the management team, the company's ethos, or more pervasive. As pointed out by SN 924, seems that this is a recurrent theme with many password systems (last pass, keepass, etc.)

Back to our story, a backbone of crypto has been hardware wallets, and many users assumed that these were well designed. Ledger the company had stated

Nov 2022: A firmware update cannot extract the private keys from the Secure Element — Ledger

However, all this changed when they decided to provide a recovery service for the seed phrase (a combination of 24? words that generate the crypto for the wallet). Their new service will allow you to extract the seed phrase from the wallet and send it to ledger (a company with a tainted security record). Thus with those words, you can get control of the funds controlled with that wallet. One of the examples has been that government can subpoena the recovery seed to collect your funds.

Their new statement is

May 2023: Technically speaking it is and always has been possible to write firmware that facilitates key extraction — Ledger@Ledger, do you now understand the problem? pic.twitter.com/czG53SuCOu

This link shows a possible model of the logic around the secure enclave.

This isn't just a 180-degree change but a complete change of game. Can't say that open source is a solution either. As drilled into us at SN, TNO and unless we can audit, we can't be certain of the trustworthiness of the system. Even Steve gives Apple some degree of trustworthiness, but we probably can't any other company ever again. Apple hasn't always been outright frank about its policies either.

An even more worrisome offshoot of this can be a reversed engineer firmware based on their latest one (2.2.1?), which will allow some miscreants to extract the seed phrase for their own interests. One of the recurring themes at SN has been that once a patch has been released, people will develop hacks that abuse those weaknesses.