Ledger has launched an investigation into reported crypto losses involving customers in Southeast Asia who purchased its hardware wallets through a reseller identified as CryptoBillis. The report estimates the losses at $86 million.
As a precaution, Ledger has urged CryptoBillis to suspend all sales and shipments of Ledger devices while the investigation continues. The hardware wallet provider has also issued guidance to customers who purchased devices from resellers within the past 90 days. It urged them to take steps to protect their crypto assets.
Risks of Third-Party Hardware Wallets
The guidance shows the importance of wallet security, especially when purchasing a hardware wallet from third-party sellers. A hardware wallet is designed to keep private keys offline. This reduces exposure to online threats and activities. However, users must still ensure that their devices and recovery procedures are secure.
Notably, customers who purchased a Ledger device from CryptoBillis but have not yet set it up are advised not to begin the setup process until further notice, perhaps when the investigation has been concluded. Additionally, Ledger strongly recommends that those who have already activated their devices should consider transferring their assets to a new Ledger signer using a newly generated recovery seed.
A recovery seed (also known as a seed phrase) is a sequence of 12 to 24 random words that acts as a master key to your crypto wallets. It translates a wallet’s complex mathematical private keys into a human-readable list of words.
Ledger Yet to Confirm the Cause of Losses
This recovery seed is especially important because it provides access to the crypto assets a wallet controls. If someone else or the wrong hands obtains that seed, they may be able to access and move funds without the owner’s permission. This is why users should never share their recovery phrase or enter it into websites or applications they do not trust.
Ledger has not confirmed whether CryptoBillis was responsible. The wallet provider has also not disclosed the cause of the reported losses. As the investigation continues, the latest development shows increasing losses in the crypto space.
For now, Ledger has advised affected users to follow official guidance and avoid sharing sensitive wallet information. The company added that it will keep updating users as more information becomes available.
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