Pascal Gauthier, the CEO of Ledger, suggested on May 22 that wallet keys stored through Ledger Recover could be made public in the event of government sanctions.
Subpoenas can reveal user seeds
Under Ledger’s new Recover program, user wallet seeds can be “shared” and stored by three different parties. The crypto community has recently raised concerns that shard holders could reveal user seeds or take 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 whether we will be subpoenaed by a government [that says they] would like [us] to retrieve the three shards.”
Gauthier suggested that governments usually issue subpoenas only in rare cases related to terrorism, drugs and other crimes.
He said that average individuals are not summoned 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 governments could issue subpoenas for tax reasons, as the Internal Revenue Service (IRS) had previously subpoenaed Coinbase to obtain customer data. In fact, the IRS has subpoenaed several crypto companies, including Kraken and Circle, for user information.
Gauthier said that Coinbase provides banking services, which Ledger does not. He insisted that Ledger has no information of interest to the IRS.
Others on the podcast noted that Ledger uses extended public keys (x-pubs), which show user activity. While this may be of interest to tax authorities, 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 unfamiliar with the feature, they can use Ledger’s other storage methods.
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