Hardware wallets - should they still be recommended as safe?

[pawel7777]

In case you missed it, there's a fresh warning regarding one of the "official authorised resellers" of Ledger wallets going rogue and secretly installing microchips that would allow the perpetrators to steal private keys.

https://bitcointalk.org/index.php?topic=5596402.0
https://bitcointalk.org/index.php?topic=5596352.0

Short summary (if I get it right):
- a shop in Malaysia that was listed as an official authorised Ledger reseller, operated as such for years
- secretly they were adding spying microchips to every hardware wallet
- they would repackage wallets to make them look legit and untampered
- this allowed them to spy and steal bitcoins from unsuspecting victims

This topic is not meant to duplicate existing linked topics, but just wanted to use the Ledger example to spark some discussion about whether hardware wallets should be considered as safe in general and should they be recommended to new, less tech-savvy users.

This is not the first security incident relating to hardware wallets and not the first one relating to Ledger wallets.
Few other mentions:
- 2026 - Coldcard - flawed seed generation
- 2023 - Ledger Connect Kit supply-chain attack
- 2020 - Ledger - customer database breach
- 2019 - Trezor and KeepKey - physical seed extraction

I was always hesitant to use any hardware wallet as the means of holding any significant amounts. There's just too much trust involved. And even if you trust the owners of the manufacturing company, there are always some other risks, like rogue employees, any authorised partners, or even delivery companies.

Are there any steps a user can take to make sure his funds on a hardware wallet are truly safe, or should they only be used like mobile phone wallets - only for storing small amounts?

[coinlary]

In case you missed it, there's a fresh warning regarding one of the "official authorised resellers" of Ledger wallets going rogue and secretly installing microchips that would allow the perpetrators to steal private keys.

That's not confirmed but they are prime suspect.

Short summary (if I get it right):
- a shop in Malaysia that was listed as an official authorised Ledger reseller, operated as such for years
- secretly they were adding spying microchips to every hardware wallet
- they would repackage wallets to make them look legit and untampered
- this allowed them to spy and steal bitcoins from unsuspecting victims

Again, that your second point is yet to be confirmed, but all known for now is that, people who purchased from them recently got a compromised-tampered device. And of course, it spy on seedphrase which is then used to drain such wallets .

Are there any steps a user can take to make sure his funds on a hardware wallet are truly safe, or should they only be used like mobile phone wallets - only for storing small amounts?

Literally nothing other than using a reputable hardware wallet, confirm you got the legit and staying active to every update I.e know when to update or switch to a new model.  

[Joy- maker]

This topic is not meant to duplicate existing linked topics, but just wanted to use the Ledger example to spark some discussion about whether hardware wallets should be considered as safe in general and should they be recommended to new, less tech-savvy users.

This is not the first security incident relating to hardware wallets and not the first one relating to Ledger wallets.
Few other mentions:
- 2026 - Coldcard - flawed seed generation
- 2023 - Ledger Connect Kit supply-chain attack
- 2020 - Ledger - customer database breach
- 2019 - Trezor and KeepKey - physical seed extraction

No doubt that, Hardware wallets offers better protection against online attacks,  but that doesn't mean they are completely safe. Because people involved in manufacturing, distributing and selling them can also become a security risk.  I also understand that chosing a hardware wallet is not the most important thing,  but understand how to use it safely.

I can't say hardware wallets are completely safe, or argue that they are unsafe because of what people say or the incidents being reported. However,  recommending them to people with little technical knowledge is not advisible,  because I wonder how they would be able to verify whether a hardware wallet has been secretly modify before purchasing it. Because an authorized reseller can potentially become a threat, as in the case of ledger wallet.

[BitMaxz]

Actually, using a hardware wallet means you are trusting them with your funds.

Why don't anyone just use the official wallet instead of the one created by developers and protect themselves from online attacks?

The only reason why people use hardware wallet it support multiple coins, and they are easier to use than having multiple wallets in a single device.

However, since this device still needs to connect to any device to sign a transaction, even if it is clean and not implanted or tampered with, if the device is connected to a PC or phone connected online, there are still possibilities that this can be hacked.

So having cold storage or an offline device that you know never reaches the internet is still much safer than using hardware wallets that come from an authorized reseller or even directly from the manufacturer.

You just trusting 3rd parties with your funds and having knowledge to protect your wallet is a must if you want to avoid those online attacks. Having a hardware wallet is just a shortcut, but the bad side is you don't know how it protects your wallet even though the open-source code is provided. Do you think you can read it and say that the device is super secure and that no one can crack it?

Note: hackers and scammers can develop; they always come up with new plans and develop much more powerful tools to attack those hard wallets. Offline wallets are much more powerful than this because you know what's inside your PC but are vulnerable only to physical attacks.

[boyptc]

Short summary (if I get it right):
- a shop in Malaysia that was listed as an official authorised Ledger reseller, operated as such for years
- secretly they were adding spying microchips to every hardware wallet
- they would repackage wallets to make them look legit and untampered
- this allowed them to spy and steal bitcoins from unsuspecting victims

And another one has appeared --> Ledger Wallet Spy Implant Scare Spreads To Europe As Crypto Losses Top $86M: Report

Are there any steps a user can take to make sure his funds on a hardware wallet are truly safe, or should they only be used like mobile phone wallets - only for storing small amounts?

With these incidents, what I'm doing is going to spread it across different wallets. And that's to lessen the risk of losing all funds at once if ever something happens and another hardware wallet gets hacked, implanted, etc.

It's scary to order new ones lately even with official resellers for all of these manufacturers because of this. But if you're a guy who knows much technically and one of it by looking at the pcb, you're also reducing the risk of being affected if some chips are implanted along the way before it's delivered to you.

So having cold storage or an offline device that you know never reaches the internet is still much safer than using hardware wallets that come from an authorized reseller or even directly from the manufacturer.

I agree and have done this method and it's never put me into this kind of worry when these news popped.

[PX-Z]

Hardware wallet as still recommended safe? Probably still yes, but i would stay away and probably wont use or buy any of them as of the moment. It seems they were the targets of hackers or bad actors, especially the famous one.

An airgapped desktop or phone using electrum just like mentioned above is probably safer by practice, but idk, it might nor it might that there's anything someone already doing stuff from the previous months or what on the software trying. Just like any hack happened, it didnt happened on the moment it was in news but already from the previous days/weeks/months already.

[stadus]

Hardware wallets have always been recommended as one of the safest options for storing crypto especially for the long term.  So I think they are still among the safest choices despite the recent news about security incidents.

We can compare this to what happened to exchanges where even some of the biggest and most popular ones like Binance have been hacked and yet people are still using them. So what I really mean is, a security incident doesn't automatically mean that we should stop trusting the entire type of wallet.

[Darker45]

I'd rather stop short from recommending. In this kind of environment, entire lives could be destroyed by recommendations which are otherwise sincere. I don't want to be blamed in the end. Instead, I'd just be sharing my objective views comparing types of wallets, and, if possible, only if asked.

Compared to exchanges, web wallets, desktop wallets, mobile wallets, I'd still consider a great choice of hardware wallet much better. In the first place, keys stored in an offline device would be a world safer than keys stored in a device that's almost always connected to the internet.

However, of course, there's still trust involved in many aspects. I don't think you can completely eradicate them. At most, you can only minimize them. By buying directly from the manufacturer is one way of removing an unnecessary point of trust. Having said that, however, I'm afraid you can't make sure "funds on a hardware wallet are truly safe".

So, even if it's the most trusted hardware wallet that you're using, an unsullied brand so to speak, you still can't trust it with all your eggs.

[hd49728]

This is not the first security incident relating to hardware wallets and not the first one relating to Ledger wallets.
Few other mentions:
- 2026 - Coldcard - flawed seed generation
- 2023 - Ledger Connect Kit supply-chain attack
- 2020 - Ledger - customer database breach
- 2019 - Trezor and KeepKey - physical seed extraction

You shared two threads above but forgot a thread about Coldcard.
Large-scale Coldcard compromise (1596 BTC stolen so far).

There are recommendations on how to buy a hardware wallet.
[GUIDE] How to buy a Hardware Wallet the right way.

But if Bitcoin and cryptocurrency users have to do this check Integrity of Hardware Wallets
as mandatory practice, they will have reasons to consider something more simple, and convenience like software wallets and centralized exchanges or Bitcoin ETFs.

[Charles-Tim]

Are there any steps a user can take to make sure his funds on a hardware wallet are truly safe, or should they only be used like mobile phone wallets - only for storing small amounts?

The reason I do not like to recommend hardware wallet before was the issue of privacy, but security is also noticeably the second reason now. I am finding it hard to recommend a hardware wallet since last year.

Hardware wallets are too expensive to be used for holding little amount of coins. There is no point in buying one if not used to hold high amount of coins.

I prefer multisig and wallet on an airgapped device. I use passphrase.

[Don Pedro Dinero]

Are there any steps a user can take to make sure his funds on a hardware wallet are truly safe, or should they only be used like mobile phone wallets - only for storing small amounts?

In my view, I think they’re among the safest options out there, despite what’s happened, provided you’ve taken the necessary precautions – although I don’t trust them 100 per cent. Personally, I’d never keep more than $1,000 in a mobile wallet, nor  I am going to keep more than about $25,000 in a hardware wallet. And that’s only because I have diversified your wealth across other assets. It’s no longer just about the risk of being hacked; there are also wrench attacks I want to avoid.

[Frankolala]

No wallet is safe anymore, but hardware wallet is safe than software wallets. We just need to be careful on our wallet security and take every precaution measures to make sure that we don't become a victim to hackers. Hardware wallets are safe but the shipping from one place to the other is another risk for hardware wallet. This is why I prefer my own set up which is Electrum cold storage wallet where the seeds are generated in an airgap device. With this, you have the assurance that no bad actor can spy on your wallet. A strong passphrase is also very important.

[PostQuantumBTC]

In my view, I think they’re among the safest options out there, despite what’s happened, provided you’ve taken the necessary precautions

No wallet is safe anymore, but hardware wallet is safe than software wallets. We just need to be careful on our wallet security and take every precaution measures to make sure that we don't become a victim to hackers.

Let us just assume that you have $50000 in bitcoin but you lost $45000 to what happened to Coldcard users or what happened to Ledger users recently. Will you still say that hardware wallet is safe? Not the hardware wallet users fault but they lost huge amount of money.

I hope people will see how hardware wallets are not necessary and go for other alternative cold wallets.

[Basels]

I've always been skeptical about physical devices used in storing Bitcoins, and even wallets because I feared that a malicious player could be behind these wallets. Luckily, my fears had not materialized since my bitcoin has never been stolen. But with the recent happenings in the past couple of years, I can state that wallet scams and frauds are now a reality that crypto owners have to grapple with.

I remember my apprehension while setting up my first hardware wallet. My reprieve came when the firmware stated that the wallet was untampered with, but how do you even know the source of that assurance?

[Crypto Library]

I have never bought a hardware wallet just because of this fear, even after checking the prices on many websites several times, I did not go to the final payment. There was another reason that since this device is crypto connected and cryptocurrency is banned in my country, I could get stuck at the airport etc. But anyway, I think all this may have happened for my good, one after another hardware wallet incidents are giving me this kind of feeling.

Are there any steps a user can take to make sure his funds on a hardware wallet are truly safe, or should they only be used like mobile phone wallets - only for storing small amounts?

Literally nothing other than using a reputable hardware wallet, confirm you got the legit and staying active to every update I.e know when to update or switch to a new model.  

What is a reputable hardware wallet? Because I knew that Ledger, Trezor, Coldcard are reputable hardware wallet providers, but none of them are free from bad incidents.

Now, even if we purchase a hardware wallet directly from provider without using a reseller or third-party supply chain, there is still a fear that the wallet may drain.  Actually, the only solution I can find here is to use a multi-signature based wallet.

[PostQuantumBTC]

Literally nothing other than using a reputable hardware wallet, confirm you got the legit and staying active to every update I.e know when to update or switch to a new model. 

What is a reputable hardware wallet? Because I knew that Ledger, Trezor, Coldcard are reputable hardware wallet providers, but none of them are free from bad incidents.

Now, even if we purchase a hardware wallet directly from provider without using a reseller or third-party supply chain, there is still a fear that the wallet may drain.  Actually, the only solution I can find here is to use a multi-signature based wallet.

You have a very good point, hardware wallets can not be trusted and they are expensive, giving false sense of security. But since I have been on the forum I have seen people saying Ledger is not reputable but they recommend Trezor most of the time. I do not know about Coldcard than what I know when dkbit98 talked about that people should no more use it.

[EL MOHA]

You have a very good point, hardware wallets can not be trusted and they are expensive, giving false sense of security. But since I have been on the forum I have seen people saying Ledger is not reputable but they recommend Trezor most of the time. I do not know about Coldcard than what I know when dkbit98 talked about that people should no more use it.

One thing that we need to strike a balance at there is nothing more worthy or more trusted than what you have ultimately total control of yourself. We can even start by saying it’s the basis of this whole bitcoin, freedom. Now if you read most of the time in this forum you will see advice like one should learn how to build their own airgapped wallet and most people even stated it as the safest not because it’s immune to hacking but because it’s actually done by yourself than trusting a company.

If you look at almost all the compromised wallet in discussions with both coldcard and ledger been biggest hitters you would have seen that there have been warning to stop using it. Imagine someone still having a wallet of over $100k on ledger, a company that has been accused of their bad seed phrases recovery process, then one can not blame the hardware wallets alone but also people negligence to adhere to advices

[bitmover]

What is a reputable hardware wallet? Because I knew that Ledger, Trezor, Coldcard are reputable hardware wallet providers, but none of them are free from bad incidents.

Now, even if we purchase a hardware wallet directly from provider without using a reseller or third-party supply chain, there is still a fear that the wallet may drain.  Actually, the only solution I can find here is to use a multi-signature based wallet.

Coldcard had a very amatour flaw. Maybe even a criminal one.

If you buy a good hardware wallet straight from the manufacturer,  chances are basically zero you will lose money.

Those ledger wallet bought from a shady third party were modified hardware. It is not fair to blame ledger.

[348Judah]

Hardware wallets can be recommended as safe because not all of them are corrupted or pass through the same channel orders that are affected. Anything could have resulted in a hardware wallet getting compromised, and this is why the developers must ensure that, from their side down to the end users, everything is well monitored with the best security measures for privacy and to exclude any third-party influence on the process of acquiring their wallets.

[Catenaccio]

Hardware wallets can be recommended as safe because not all of them are corrupted or pass through the same channel orders that are affected.

If you have money, intend to use your money for purchasing bitcoin, store your financial wealth in bitcoin, you will need very high level of security and safety. Because you and nobody want to lose your bitcoin after spending money to buy it.

Bitcoin has highest value in cryptocurrency industry because it is a biggest blockchain which is also strongest and most secure. It's better than altcoin blockchains in security for fund storage and transactions without reversibility and centralized fund freeze. However, the challenge is users must choose good wallets, use those wallets rightly for achieving security and safety for their funds.

Anything could have resulted in a hardware wallet getting compromised, and this is why the developers must ensure that, from their side down to the end users, everything is well monitored with the best security measures for privacy and to exclude any third-party influence on the process of acquiring their wallets.

There are criteria for choosing wallets, either software wallets or hardware wallets. If you feel unsafe with hardware wallets, can not check its integrity physically, you can use software wallets but remember to verify software wallets before using.