EXCLUSIVE: Ledger CEO Says Open-Sourcing Does Not Equal Better Security

Ledger CEO Pascal Gauthier says open-sourcing the company's Recover code does not equal better security, but ensures more transparency so people can verify the code is secure.

Gauthier spoke with Benzinga regarding the roll-out of the Ledger Recover service after the Paris-based company received significant backlash on social media.

See Also: Ledger Delays Launch Of Recover Following Uproar Among Its Customers

Regarding the cryptocurrency hardware wallet provider's product firmware upgrades, Gauthier admitted there was a lapse in the firm's communication strategy.

"It was a mistake to release the product before we actually released content on the product and that is what caused the panic and we apologize for it," he said.

Individuals ought to have absolute ownership and control over their digital wealth, he maintains  — an idea that corresponds with the principle of self-governance within the cryptocurrency sphere.

Regarding the controversy over the product's subpoena vulnerability, Gauthier stated: "We root for our users, and we work for the best interests of our users."

Users should evaluate their risk profiles, he says, stressing the product's optional nature.

Passphrase

In terms of privacy, Ledger has introduced a feature called a "passphrase," which will block any unauthorized access to a user's private keys. This layer of security protects against unwanted intrusion from parties including Ledger itself, CoinCover, or EscrowTech, making subpoenaing private keys an impossibility.

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When questioned on the retraction of the Recover service amid potential security implications, Gauthier said that there were no security concerns.

Demand For Transparency

"Open sourcing the code has no real value in terms of security but does have value in terms of transparency," Gauthier says.

Open-source code could indeed be audited, but does not guarantee protection against hacks, stressing the importance of external audits, he explained. Making the code public doesn't completely rule out the possibility of bad actors exploiting the system.

That scenario, he says, is unlikely based on the company's ten-year track record.

Gauthier further addressed the common practice of linking identity to Bitcoin BTC/USD transactions, particularly when these transactions originate from an exchange with KYC processes in place.

Ledger has features allowing users to maintain a high degree of privacy if required, including its open-source roadmap. The company has also earned the distinction of being the only hardware wallet certified by a third party.

Data Leaks

Gauthier also emphasized the secure nature of Ledger's operations. All data interactions are encrypted, he says.

As for Ledger's recovery process partners — CoinCover and EscrowTech — Gauthier touted their long-standing reputation in handling official documentation and their ability to maintain encrypted databases.

Their respective approaches, he emphasized, significantly mitigate the risk of data leaks.

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