Reports about wallet-draining by Ledger users. Total losses $86M+

[libert19]

How can the average user ever trust a hardware wallet at this point and where does it stop? We’re talking about a step that should create extra protection but instead has been compromising it. Heck, how can you even trust wallet apps aren’t skimming your seed phrases too?? Are we forced to go back to generating our own air gapped device paper wallets and forever letting our funds sit there without any interaction?

As of currently, this appears to be a supply-chain attack, as the wallets were tampered with. So, now your choice is to only purchase from official websites; once that's also compromised, we'll see about it later. You are welcome.



Now, ya'll know what will happen in HW sector after this incident? I foresee brands implementing measures to make sure that there is nothing watching the screen and there is no data transfer from HWs. However that's done? I don't know, but I expect measures to be implemented.

We are witnessing the evolution in HW sector ladies and gents, and it'll constantly evolve without ever being perfect for there is nothing like being infallible — that's just nature of the world in form of time and conflict. Oh shit, I seem to have given up.

I hope you liked my philosophy class.

^ I thought I was done here, but then I opened Ledger's X account and I was greeted with even more comedy!

[LoyceV]

it's hard to trust Ledger again.

That's the understatement of the year

[Rymaster]

As of currently, this appears to be a supply-chain attack, as the wallets were tampered with. So, now your choice is to only purchase from official websites; once that's also compromised, we'll see about it later. You are welcome.

Because that worked so well for Coldcard users. At this point, you’re better off just not using a hardware wallet. The average user simply lacks the ability to verify, not trust with these devices.

[Faisal2202]

Just another reason to justify my long dislike of hardware wallets!

It's sad, but I agree. Although I did not dislike these HWs, due to a lack of accessibility and too much middleman involvement, I did not buy from these resellers. I prefer to buy directly. Even a few days ago, when the buyers' data was breached, I did say we should find a trustworthy middleman for this. But now all fingers are pointing at those middlemen, like Ledger can't be involved in this! What if Ledger itself is involved? Where is the proof they are not?

Pooya, the problem is not with the technology. It's with the greed these people have that they can never build a hack-proof system, just because they can build a hack-proof device. This loss suffered by a person, if confirmed, is enough to give someone goosebumps, and my feelings would be like this guy below.

This really got me thinking if it’s even possible to identify a bug on a hardware device just by looking at a picture. Is this a joke or something?

However, I’m kind of curious with the rate at which series of attacks on bitcoin wallets recently, its making me to to doubt if bitcoin is really going to get that adoption and acceptance like we are thinking in the nearest future, if all this attack continues like this, then we probably might never get there.

I agree with your concerns and it's understandable too but these kinds of attacks are not only limited to btc. People have been losing their money via atm skimming the same way, even their bank card details and other online banking frauds have cost people a lot of money. Several call centres are now being closed all over the place where people were running carding operations, and that's a big win but still we have not stopped using banks and fiat, and no one will stop using crypto either.

Also, you should read this, because if you have purchased or want to purchase a hardware wallet then you can learn how to stay on the safer side.

There is a very old guide, and now it's time to summon it back here
Check Integrity of Hardware Wallets.

Clearly an official reseller store with this scam is very scary.
[GUIDE] How to buy a Hardware Wallet the right way.

Not all people can check hardware wallet integrity so this scam is actually a big bomb in Bitcoin community. "Don't trust, verify" is quite common reminder but I think it's too technical for Bitcoin users especially newbies to do all verification before they starting with purchase and storage.

Perhaps Bitcoin Spot ETFs and centralized exchanges will have advantage this time. Anyway there is a Reminder: do not keep your money in online accounts.

[Wind_FURY]

Is this Ledger hardware wallet "safe?

  

If you read my posts in the topic "Show off your hardware wallet", I have already said that I have NEVER used it since the moment that I opened the box.

BUT we probably need to start disassembling our Ledger devices and post pictures to show everyone and ask the technical hardware wizards if their normal/safe.

Here's my Ledger. I believe it's safe?






POST YOURS AND LET'S SEE WHAT'S DIFFERENT

[OmegaStarScream]

People still use Ledger after they released this product years ago?
Ledger Recovery - Send your (encrypted) recovery phrase to 3rd parties entities

You would be surprised. It doesn't look their growth[1] has been slowed down in anyway since the release of the recovery feature in 2023. Currently at 8 million units sold vs 2M+ from Trezor. Still don't understand why myself.

[1] https://coinlaw.io/how-many-people-work-at-ledger/

[Hypnotizer]

People still use Ledger after they released this product years ago?
Ledger Recovery - Send your (encrypted) recovery phrase to 3rd parties entities

You would be surprised. It doesn't look their growth[1] has been slowed down in anyway since the release of the recovery feature in 2023. Currently at 8 million units sold vs 2M+ from Trezor. Still don't understand why myself.

[1] https://coinlaw.io/how-many-people-work-at-ledger/

I’m also baffled by their number of sales despite these whole controversies, but I kinda believe that people keep choosing ledger because of convenience. I mean an average crypto user before the ColdCard incident believes Hardware wallets are the safest means to store crypto and buying any hardware wallet automatically means “your crypto is safe”.  

Given the fact that many people are influenced by advertisement and don’t bother doing any further research especially when buying something, Ledger has some good advantage because of their heavy marketing and I think that’s why they still make this amount of sales.

[spiker777]

Not a fan of Ledger, but some of the other posts on the subreddit are not really showing or explaining anything. Difficult to take seriously.

It’s still unclear which type of scam was used but Ledger has actually issued an announcement [1] that victims are those who purchased their ledger wallet from a third party reseller named CryptoBills and are warning those who got their wallet from the reseller most importantly those in South East Asia to move their coins to a new device and wallet (seed and phrase)

Also there is report that the exploit was carried out through phishing email with the some reporting that the email looks like the in the image [1].

[1] https://x.com/ledger_support/status/2108551100613714002?s=46&t=QdZ3_ryvESgybupE3D6xaQ

Image [1]

If both claims are true then there is two lessons here

1. Don’t buy your hardware wallet from resellers or other third party sources

2. Don’t rush to update your wallet when you get a message, wait to verify such information first.

The image you attached is not visible to everyone until they click quote. you might want to fix that.
And buying a hardware wallet, which is supposed to be the safest way to store cryptocurrency from a third-party seller, is already a bad idea. Everyone should've known that. even Ledger itself should not authorize any third-party seller.
At this point I have zero trust on Ledger, This is not the first incident. and not the last either.

[Pmalek]

Because that worked so well for Coldcard users. At this point, you’re better off just not using a hardware wallet. The average user simply lacks the ability to verify, not trust with these devices.

How are you going to verify what your computer or smartphone does and the chips and components in them? Not to mention the various software people use. If people are better off without hardware wallets, then you are left with software wallets or the more complicated task of creating an airgapped computer or paper wallets. An airgapped and stateless hardware wallet you can build yourself with entropy you provide yourself from dice or coin tosses is yet to be compromised if my memory serves me right.

[Just Say]

The Cryptobilis team needs to be arrested asap,  

They must have worked physically on the hardware wallets and sold it to the public, this is a big crime that needs action immediately, they need to crucified those guys.

I feel for this fella, who just not too long bought 10BTC and lost it because he got Ledger from same Cryptobilis.




https://x.com/lookonchain/status/2108585005635301427

Indeed those who purchased these hardware wallets from 'CryptoBilis' and safely kept their Bitcoin and Ethereum there, have already lost their crypto assets to hackers.. Basically, only those who invest their hard-earned money and hold Bitcoins in this wallet are getting scammed because they believed that their crypto-assets would be safely stored here.

But we are surprised that two reputed hardware wallets have been hacked this year like cold card hack earlier and more than 1800 bitcoins were stolen from around 5200 addresses and at present I noticed around 86 million dollars worth of crypto was stolen from Ledger. However you notice that another person's old wallet was safe for eight years but he bought a ledger from Cryptobilis a month ago and transferred all his assets to it, resulting in the theft of about 59 Ethereum.



https://x.com/lookonchain/status/2108852179381756027

[NABiT]

Situation Update: Ledger can confirm that one of the impacted users’ devices contained an unauthorized hardware implant. https://x.com/Ledger_Support/status/2108968264055345381?s=20

[Richy_T]

How are you going to verify what your computer or smartphone does and the chips and components in them? Not to mention the various software people use. If people are better off without hardware wallets, then you are left with software wallets or the more complicated task of creating an airgapped computer or paper wallets. An airgapped and stateless hardware wallet you can build yourself with entropy you provide yourself from dice or coin tosses is yet to be compromised if my memory serves me right.

Good point. Worth remembering that there's no need to choose only one method for Bitcoin storage. Wallets that have never been able to touch the internet remain the best option for long term secure storage (with proper precautions) but sometimes convenience is needed so hardware wallets, software wallets or even custodial wallets can be reasonable for small amounts.

This hardware hack is concerning but has always been a known potential risk. I guess you can buy from a third party and risk a hack or buy from Ledger who have had security breaches themselves which have led to phishing emails which can lead to a loss of funds for the unwary.

[Hamza2424]

Situation Update: Ledger can confirm that one of the impacted users’ devices contained an unauthorized hardware implant. https://x.com/Ledger_Support/status/2108968264055345381?s=20

So it's official now. Well, members have shared implants in older generations of Ledgers, and this is not new, but the loss is too big. I hope the people behind this will be in prison soon because I think in operations like this, there must be some traces or clues they can use to identify the person. For example, if they really used eSIMs to transfer the data back to themselves, they might be found. But using eSIMs and proxies to avoid detection is not hard for them if they can pull off this stunt on such a massive scale.

There must be more than one person involved, as it was a grand operation, and in such operations, authorities eventually find a clue. They might have to use their spies or something, but the amount is not too big. I hope higher agencies will take a look at this too.

At this point, I think I will also open my Ledger, even if I didn't buy it from this seller, and check if there is any implant. But Ledger should provide more details about what the implant was because it will be the same for all the others. At this point, there is no harm in revealing it. Instead, others could confirm whether they are at risk or not.

[mikel_012]

So it's official now. Well, members have shared implants in older generations of Ledgers, and this is not new, but the loss is too big. I hope the people behind this will be in prison soon because I think in operations like this, there must be some traces or clues they can use to identify the person. For example, if they really used eSIMs to transfer the data back to themselves, they might be found. But using eSIMs and proxies to avoid detection is not hard for them if they can pull off this stunt on such a massive scale.

There must be more than one person involved, as it was a grand operation, and in such operations, authorities eventually find a clue. They might have to use their spies or something, but the amount is not too big. I hope higher agencies will take a look at this too.

At this point, I think I will also open my Ledger, even if I didn't buy it from this seller, and check if there is any implant. But Ledger should provide more details about what the implant was because it will be the same for all the others. At this point, there is no harm in revealing it. Instead, others could confirm whether they are at risk or not.

Yes, it is official

This is the photo of the altered device from Mark Karpelès that he bought in Malasya

You can see there is an LTE module and an eSIM to communicate with the gang that did this and send all the seed details

[PrivacyG]

The recent losses from such thefts are going to cross one Billion Dollars in a really short matter of time.  While the people responsible for this do need to see really harsh consequences, people who thought they can rely on comfortable Third Parties should also give up their comfort and start actually caring how they store their Cryptocurrencies.

It is bad enough that so many devices are compromised, it is even worse when you think about how it is impossible to find out if Ledger has any blame.  The closed source nature of their devices make things more difficult to investigate, it could always be a large amount of compromised Ledgers AND a really bad vulnerability they have not found yet.

[nikola22]

How are you going to verify what your computer or smartphone does and the chips and components in them? Not to mention the various software people use. If people are better off without hardware wallets, then you are left with software wallets or the more complicated task of creating an airgapped computer or paper wallets. An airgapped and stateless hardware wallet you can build yourself with entropy you provide yourself from dice or coin tosses is yet to be compromised if my memory serves me right.

we must admit that as the price of Bitcoin and other crypto rises, attacks on wallets are becoming increasingly sophisticated. when attackers cannot access the devices themselves, they try to use other methods such as exploiting vulnerabilities through hardware wallet manufacturers' partners, monitoring supply chains or targeting recipient addresses and data. in effect, a security breach can occur in places where one was never even suspected. I can only imagine the methods bad actors will use when Bitcoin reaches a price of $500 000 or more.

2026 was far from pleasant for hardware wallet owners, given the number of incidents that occurred.

https://x.com/0xchainink/status/2108561878230478957

[Meuserna]

Situation Update: Ledger can confirm that one of the impacted users’ devices contained an unauthorized hardware implant. https://x.com/Ledger_Support/status/2108968264055345381?s=20

If you buy direct from Ledger, you get your name and home address leaked. If you buy from an authorized reseller, you get a hacked device. You're screwed either way.

This is why I recommend DIY solutions like SeedSigner, ShieldSigner, Krux & Kern to those who know understand self custody. By not using "hardware wallet" hardware, you remove supply chain risks from your setup. In theory, you can remove those risks by buying direct from the company that makes a hardware wallet... but then again, maybe not, especially for smaller hardware wallet companies. In the end, you still have to trust those companies.

Going the SeedSigner route means using an off the shelf Raspberry Pi. There's no supply chain risk because the thing wasn't designed to be a hardware wallet. To be even safer, manually generate your own random seed phrase.

Imagine the attacks thieves and hackers will be attempting to pull off when Bitcoin hits a million.

[coinlary]

Apart from the new Cryptobilis owner being a suspect, the entire logistics down to their shipping providers, should be added to the suspect list.

Are we forced to go back to generating our own air gapped device paper wallets and forever letting our funds sit there without any interaction?

Maybe,  but I don't  expect it to get to that extent, unless people choose to use that particular method and I'm sure that there're still some people out there who prefer doing it the old way.

A true cold storage setup with a reputable wallet is quite enough imo , the only extra security needed is a passphrase or multisig.

[LTU_btc]

After this story no way that I would every buy hardware wallet from official resellers. I can't trust third part anymore after this. And yeah, why always Ledger, like their reputation wouldn't be bad enough. But people will continue to buy from them, no matter what.
 

If you buy direct from Ledger, you get your name and home address leaked. If you buy from an authorized reseller, you get a hacked device. You're screwed either way.

This is why I recommend DIY solutions like SeedSigner, ShieldSigner, Krux & Kern to those who know understand self custody. By not using "hardware wallet" hardware, you remove supply chain risks from your setup. In theory, you can remove those risks by buying direct from the company that makes a hardware wallet... but then again, maybe not, especially for smaller hardware wallet companies. In the end, you still have to trust those companies.

Going the SeedSigner route means using an off the shelf Raspberry Pi. There's no supply chain risk because the thing wasn't designed to be a hardware wallet. To be even safer, manually generate your own random seed phrase.

Imagine the attacks thieves and hackers will be attempting to pull off when Bitcoin hits a million.

Yes, there is some alternatives. I looked into these names that you mentioned and it looks way too complicated for average user who wants ready to use, simple product. Yes, it's an option for more tech advanced people, but I guess such people is minority.

Why is anyone still buying Ledger? They've lied in the past, and replaced their crucial "seeds can't leave the device" for "seeds will be uploaded to our servers" years ago. I would have expected them to just leak all seeds at some point, but even if they lied only once, they never deserve to be trusted again! This has been known for years!

Why? Because average user don't check Bitcointalk or Reddit and they're not aware about all these issues related with Ledger. And it's not secret that Ledger invest quite a lot money into marketing, what helps to cover all this negativity

[OutOfMemory]

People still use Ledger after they released this product years ago?
Ledger Recovery - Send your (encrypted) recovery phrase to 3rd parties entities

You would be surprised. It doesn't look their growth[1] has been slowed down in anyway since the release of the recovery feature in 2023. Currently at 8 million units sold vs 2M+ from Trezor. Still don't understand why myself.

[1] https://coinlaw.io/how-many-people-work-at-ledger/

The more something goes mainstream, the more it's getting fucked by the people.
I actually think that most Ledger customers believe that the recovery feature is a brilliant idea.
But this is just how homo sapiens roll.
Pointing to the Bell Curve, the ratio isn't favoring the more intelligent humans, so normality seems to be tied to individuals making worse decisions over time. Add Dunning-Kruger to this and there we go.