I can't actually believe what I`m reading, this seems absolutely crazy for a hardware wallet provider to encourage you to backup your seed phrase online AND give them your Passport/ID – especially one that has previously suffered a data breach! But, with todays latest Ledger Nano X firmware (2.2.1) update, they're introducing a service/feature called “Ledger Recover”. Strangely at the point of posting this, the firmware release notes are not yet available on their website, but it is very real (see attached screenshot).
The release notes state:
Starting today, you can subscribe to Ledger Recover.
Ledger Recover is an ID-based key recovery service that provides a backup for your Secret Recovery Phrase.
Ledger Recover is currently compatible with Ledger Nano X and available on Android and iOS running the latest Ledger Live version.
At the moment, a passport/national identity card issued by the European Union, the United Kingdom, Canada, or the United States is required to subscribe to the service. We will be covering more countries and adding support for more documents in the coming months. Stay tuned.
Again, I`m in disbelief about this. Apart from the risks that they're hacked again, apart from it flying in the face of never sharing your seed, and never storing it online, it opens the door to a whole new level of crypto scammers!
Ledger, please reconsider this.
//edit to add more information
More information from a wired article. The confounder also confirmed on the ledger forum that the seed leaves the device. This sounds like a form of multi sig, but still…. Nope!
Ledger is preparing to launch a new service called Ledger Recover that splits a wallet recovery phrase—basically, a human-readable form of the private key—into three encrypted shards and distributes them to three custodians: Ledger, crypto custody firm Coincover, and code escrow company EscrowTech. If somebody loses their recovery phrase, two of the three shards can be combined—pending an ID check—to regain access to the locked funds. Essentially, Ledger Recover is an additional safety net; for the price of $9.99 a month, it takes the jeopardy out of crypto’s version of stuffing dollars under the mattress. It’ll be available in the UK, EU, US, and Canada and come to other territories later in the year.