Ledger Crypto Wallet's Seed Phrase Recovery Service Draws Criticism for mandatory use of Passport
Amongst the goal of decentralization is providing anonymity/security for users which is gradually been mitigated as more regulation surrounding crypto privacy are being introduced as day passes by which tends to weaken how privacy policy works in decentralized industries, in 2020 a breach attack on Ledger hardware led to at least 300,000 users phone number leak and 1 million email compromise. Ledger data leak this data breach led the hardware provider to strengthen its privacy policy so as to avoid reoccuranace of such breaches in the future, probably that wasn't a lesson well learnt as Ledger release a new firmware update that will allow users to connect their Recovery Phrase Keys with other means of identification such as National identity cards, Passport to connect to their Ledger wallets.
what could go wrong?
Bitcoin network is said to be the only network that is solely decentralized at the moment, all other networks could virtually be driving their inspiration from Satoshi work this means as long as a network isn't fully run on a node and relies on centralized authorization for its privacy and legal terms they are always bound to make changes on their written policies.
Ledger being a security company also means they have to always follow what's laid out by those in authority, below step shows how the new firmware works and what is required of users.
STEP 1: Your identity is verified using your ID document and a selfie recording.
STEP 2: Your Ledger Nano X duplicates your Secret Recovery Phrase and encrypts the duplicate. This encrypted duplicate is the backup for your Secret Recovery Phrase.
STEP 3: The backup for your Secret Recovery Phrase is linked to your verified identity.
STEP 4: The backup is fragmented into three pieces. Each of the encrypted fragments is secured independently by Ledger, Coincover, and a third provider.
Source
Providing your identity to connect to a self-custodial wallets means anything could go wrong including total tracking of one transaction and policing users spending, giving more room for hackers to access users data in case of any security breach.
ID theft is common allowing users to connect their means of identification to a wallet base provider can be a disaster for users this could be a disaster waiting to happen anytime soon, hackers could also possibly use this service to recover users seed phrase keys.
Can we still trust Ledger with our keys?
There are lots of controversial debates on social platform concerning this new update and majority have aired their views about this new firmware policy as a complete disaster that will lead to more wallet thefting Not your keys not your funds still stands sharing one's means of identification means sharing your keys with third parties.