What Initiative should take by the govt. and the hardware wallet providers?

[Crypto Library]

Sorry it is going to be another topic regarding the hardware wallet incidents, But I don't want to discuss here what initiatives we should take, which has already been discussed.

I want to discuss here that all these incidents, especially regarding hardware wallet tampering, the issue of tampering is not new, it has happened many times before.

I have seen many people suggesting to open the hardware wallet and check if it has been tampered. Can't the matter be made so that the hardware wallet companies use transparent bodies so that when the user checks himself, at least the warranty will not be lost?

And at the same time, what measures can the government take for this?

For example, will no one take responsibility for the users who lost their assets due to the firmware of hardware wallets? Can the regulator do anything here?

And if tampering is done by any official reseller, are the wallet providers completely exempt from liability? Then I think the government should cut off the reseller process or make the wallet providers take responsibility in case of any bad incident.

[Livingleged]

will no one take responsibility for the users who lost their assets due to the firmware of hardware wallets? Can the regulator do anything here?

I’m just think about insurance policy right now, if those companies involved has a insurance policy, then I guess users affect will worry less because the insurance should cover for the loses.

And if tampering is done by any official reseller, are the wallet providers completely exempt from liability? Then I think the government should cut off the reseller process or make the wallet providers take responsibility in case of any bad incident.

I didn’t know government had their own resellers, I only assume it’s individual sellers that link to the companies providing the wallets. I thought government dont even support self custody?

[Ambatman]

And you believe they are going to stop there? It would just introduce restrictions or centralisation.
Well they can be sued as every company
And if the evidence is against them they could face the law.

I’m just think about insurance policy right now, if those companies involved has a insurance policy, then I guess users affect will worry less because the insurance should cover for the loses.

It won't be able to cover all losses just some percentage if it even works
And they don't state it goes against their contract.

[Frankolala]

I think keystone hardware wallet is one step ahead of the rest hardware wallet because they have anti tampered device called self destructive mechanism. I read that if you implant a chip in it, it will automatically show you secured element error.

There's nothing the government can do in this case because no one has any concrete evidence that Mr X was the bad actor. This is one of the risk that comes with being your own bank. Ledger gave their buyers freedom to buy and return their hardware wallet after a complaint. They still foolishly keep the hardware wallet and sell it to another customer which is where the problem lies.

[MArsland]

I think keystone hardware wallet is one step ahead of the rest hardware wallet because they have anti tampered device called self destructive mechanism. I read that if you implant a chip in it, it will automatically show you secured element error.

There's nothing the government can do in this case because no one has any concrete evidence that Mr X was the bad actor. This is one of the risk that comes with being your own bank. Ledger gave their buyers freedom to buy and return their hardware wallet after a complaint. They still foolishly keep the hardware wallet and sell it to another customer which is where the problem lies.

I think other hardware wallets should implement a self-destruct system like the Keystone you mentioned. It may sound extreme but this is precisely where the point of a very effective option to prevent burglary.

Government involvement is usually much more complicated, given that their goal is to control while the existence of hardware wallets aims to provide freedom of ownership of assets for users. So it would be very risky and also contrary to involve the government in the process.

[ColdLava40]

I have seen many people suggesting to open the hardware wallet and check if it has been tampered. Can't the matter be made so that the hardware wallet companies use transparent bodies so that when the user checks himself, at least the warranty will not be lost?

How many people would even know what to check inside the wallet?

It only makes it more difficult for a common or a newbie investors to use because they have no idea about such technical. I myself will not even be able to tell if a hardware wallet had been compromised. It's not going to solve the issue.

And at the same time, what measures can the government take for this?

For example, will no one take responsibility for the users who lost their assets due to the firmware of hardware wallets? Can the regulator do anything here?

And if tampering is done by any official reseller, are the wallet providers completely exempt from liability? Then I think the government should cut off the reseller process or make the wallet providers take responsibility in case of any bad incident.

The government won't have much to say.

The hardware companies are supposed to be responsible for any future calamity that happens with their products.

What I think should happen would be to reduce the number of resellers they have around and have a way to confirm a product validity before it's sold to the public.

[BABY SHOES]

For example, will no one take responsibility for the users who lost their assets due to the firmware of hardware wallets? Can the regulator do anything here?

You mean arresting the founders of those hardware companies because they failed at firmware Over that flaw? Regulators are unlikely to do anything excessive, apart from that this is just pure negligence, not the intention to steal user funds...

And if tampering is done by any official reseller, are the wallet providers completely exempt from liability? Then I think the government should cut off the reseller process or make the wallet providers take responsibility in case of any bad incident.

Not entirely for the company... still they must be responsible, at least they only investigate where it is wrong, if there is fraud from the reseller, then the distributor is the one reported by the company.

The government will not interfere in this ha... because the company itself is wrong, or distribute its hardware without close supervision including other third parties.

[JeromeTash]

1. The manufacturing company should cut off resellers and completely discourage users from buying devices from resellers. Maybe introduce a security feature that can show that the device has been tampered with in case of any modifications.

2. The government does not give a damn. It will instead make people's lives harder. Isn't this similar to saying that the government should take care of your money? I think we all know what happens, right?

[X-ray]

Can't the matter be made so that the hardware wallet companies use transparent bodies so that when the user checks himself, at least the warranty will not be lost?

Interesting idea, I think some hardware wallets have released transparent edition, i don't know how much effective it is to prevent tampering though. One thing you need to remember, not everybody able to distinguish which device got tampered and which aren't.

And at the same time, what measures can the government take for this?

For example, will no one take responsibility for the users who lost their assets due to the firmware of hardware wallets? Can the regulator do anything here?

And if tampering is done by any official reseller, are the wallet providers completely exempt from liability? Then I think the government should cut off the reseller process or make the wallet providers take responsibility in case of any bad incident.

Historically, these kind of thing always ended up with civil lawsuit, I don't know what's going to happen to ledger, but this tampering honestly different than simple firmware exploit.

Maybe the listing of CryptoBilis as authorized reseller in Ledger's website can be a strong legal claim for a lawsuit.

[OcTradism]

I have seen many people suggesting to open the hardware wallet and check if it has been tampered. Can't the matter be made so that the hardware wallet companies use transparent bodies so that when the user checks himself, at least the warranty will not be lost?

And at the same time, what measures can the government take for this?

If you can prove your ownership of a wallet from which bitcoin was stolen by scammers, and if you can prove that scammers did criminal actions, you can sue them to government and the court. It looks easily in theory but practically any legal process will be complicated and take a lot of time.

Government and court don't protect scammers but if you are unable to collect and submit enough evidence, you can not win against scammers. Even if you win a lawsuit, I am not sure you will get 100% money back after all.

[GreatArkansas]

To be honest i'm one of those who bought Ledger from CryptoBilis last 2021, from their Lazada store which is listed as authorized reseller. so the usual advice "buy only from authorized" is not enough anymore, we followed that already.
If we are talking about safety of every hardware wallet, even let's say you will buy it direct from the manufacturer, you can't still guarantee the safety as there are already past incidents happened like some exploitation, software issues, etc.
This is also one of the downsides of Bitcoin being decentralized, some says pen and paper only also making your Bitcoin safe too. I also can't see government can solve this.

[mirakal]

1. The manufacturing company should cut off resellers and completely discourage users from buying devices from resellers.

This might not be applicable as it will reduce their sales.

Maybe introduce a security feature that can show that the device has been tampered with in case of any modifications.

But this one could be implemented by the resellers as it's the first thing buyers would visually check, if it's tampered with they can return it,.

Manufacturer-sealed packaging, this should be applied.

2. The government does not give a damn. It will instead make people's lives harder. Isn't this similar to saying that the government should take care of your money? I think we all know what happens, right?

With reports of such huge amounts of money being lost I think it's the government's job to take action.
After all, what's the purpose of having a government if we pay taxes and they don't have people to protect us from these kinds of threats?

[Kalchef]

Sorry it is going to be another topic regarding the hardware wallet incidents, But I don't want to discuss here what initiatives we should take, which has already been discussed.

I want to discuss here that all these incidents, especially regarding hardware wallet tampering, the issue of tampering is not new, it has happened many times before.

I have seen many people suggesting to open the hardware wallet and check if it has been tampered. Can't the matter be made so that the hardware wallet companies use transparent bodies so that when the user checks himself, at least the warranty will not be lost?

And at the same time, what measures can the government take for this?

For example, will no one take responsibility for the users who lost their assets due to the firmware of hardware wallets? Can the regulator do anything here?

And if tampering is done by any official reseller, are the wallet providers completely exempt from liability? Then I think the government should cut off the reseller process or make the wallet providers take responsibility in case of any bad incident.

It's already in talk, I have seen popular people talking about transparent cases for hardware wallet on twitter and this includes CZ too, I think that's going to be the way forward from now on. Many Bitcoin theft has happened and so many was recovered, this is where the government comes in, they turned into Robinhood themselves and for themselves only, once they got lost Bitcoin back it automatically belongs to them.

Every stolen Bitcoin and lost Bitcoin turns into a bounty for anyone who can go after them and get it back first, in this present Ledger incident I expect Ledger to take full responsibility, they choose that reseller. Whatever happens between Ledger company and the reseller isn't people's business, Ledger should either fight the reseller and get the coins back or make them pay and reimburse every affected victims.

[yhiaali3]

I don't know if this method is possible, but why don't these companies manufacture completely solid cases, i.e., casting the entire outer casing of the device around the electronic circuit board (PCB) using materials such as hard resin (Epoxy Resin) or reinforced plastic, so that there are no screws or spacers that allow the device to be opened and re-closed?

This can prevent tampering because any attempt to open or scrape the device to implant a malicious chip will effectively destroy the internal circuitry, preventing hackers from reassembling the device and selling it as if it were new. What do you think?

[Outhue]

OP is asking the accurate question, I have the same inside of me and I am happy someone is talking about it, since the reseller of those affected Ledger wallets are all from official reseller we don't even have to talk about it this much, it's from the official resellers that Ledger single handedly picked, who is going to take full responsibility if not them? About the transparent case I think it's a good idea but is that enough? I don't think it is, hardware wallet chips shouldn't be tampered with this easily, there should be some type of self destruction happening, if it's going to be costly because of this let it be costly.

[Agbamoni]

will no one take responsibility for the users who lost their assets due to the firmware of hardware wallets? Can the regulator do anything here?

I’m just think about insurance policy right now, if those companies involved has a insurance policy, then I guess users affect will worry less because the insurance should cover for the loses.

Government insurance is totally different from an insurance policy provided by a private company.
The government will not interfere with private companies regarding insurance policies that will protect users funds. They are mostly non-custodian wallet and for the government to be involved it will cause for centralization.

Who should pay for the protection? This question narrows down to the owners of the non-custodial wallet. They should be responsible for users money if their wallet was tampered with on their platform. If they decide to include an insurance policy to cover theft, then a certain percentage during withdrawals will be charged as a fee, meaning more tax.

[pooya87]

I don't think governments are going to do anything ever since that's not their purpose. Majority of governments are there to surveil people and take taxes!

But the companies must do something. After all they are selling a product that is security sensitive so they have to provide guarantees and some sort of insurance. The problem is that they will only do this if they feel like they are going to lose revenue if they don't.
It's like any other service like CEXes, they were once good but slowly started getting worse (more restrictions, more blocking of random accounts, etc.) and since people still continue using them, they never bothered changing and improving. So as long as these hardware producers are selling their products, they are not going to bother doing anything to protect their users since they still have a good revenue.

[Agbe]

If the resellers were caught of tampering the wallet they will be responsible for everything and they have to pay the lost coins but if they are not there is nothing anyone can do. Government can't do anything as well.

Every core bitcoin users should think of decentralization of it and not centralized kind of system. Anytime government involves in bitcoin, it makes it more centralized, and that is where the real tampering of wallets will occur, government officials like to expose data more than individuals. So what I will say let the developers of those hardware wallets should increase their security in them. When I first came to Bitcointalk and started using exchanges, things were good because the involvement of government was minimal and as government became fully involved. Things are not normal again in the using of exchanges again.

[cryptomaniac_xxx]

And if tampering is done by any official reseller, are the wallet providers completely exempt from liability? Then I think the government should cut off the reseller process or make the wallet providers take responsibility in case of any bad incident.

This could be a start, as hardware wallet companies should be held responsible and accountability even if they say that they are not the one who tampered it. It's there's responsibility to look at every reseller they have. Sort of umbrella monitoring and they should ensure that everyone of their authorized reseller wouldn't even do what the owner of CryptoBilis did to us.

For the government though, it might be hard for any crypto service if we should go under the regulations of government. This is one tenant we don't like, the government should be at our coat tail everything. Crypto services should do their due diligence and not just want to work with government.

[Comeacross]

The issue with the hardware wallets is a private product issues and I don't expect government to get involved in this. This is a self custody matters and unless we are ready for government regulation, licensing and even possible KYC, it's not a good idea to bring them into the picture.

The manufacturers should take full responsibility if their device is tampered with through their resellers. The resellers are the chain of distribution that link them with the users so they failed to chose the right reseller and should take the responsibility to refund the users. Whatever they choose to do with that reseller is left for them to decide.

The more government stay away from this issue, the better for us. After all, they can not even secure their data very well.