YHK - yet another hacker news clone

Ledger confirms hidden chip in crypto wallet amid $92M theft claims

66 points thm 2 hours ago 57 comments

Cytobit 2 hours ago | parent

What is the use case of a hardware cryptocurrency wallet besides trapping bitcoins in the Shadow Realm?

mitxela 2 hours ago | parent

Making sure malware on your PC can't steal your private keys.

numpad0 2 hours ago | parent

Like any HSMs, to put private keys in it and to let things be signed with it.

chinathrow 2 hours ago | parent

Exhibit #9387434 for reasons to stay out of crypto.

ArtTimeInvestor 2 hours ago | parent

Hardware wallets are not a solution to self-custody.

If one would make a list of things that can go wrong, starting from the supply chain that delivers parts to the manufacturer, malicious employees at the manufacturer, mistakes the manufacturer can make, attacks on the delivery chain from the manufacturer to the user, to mistakes the user can make creating, using and storing their keys - the list would contain hundreds of points.

chinathrow 2 hours ago | parent

But freedom.

Seriously, that's why we have banks, still.

iammrpayments 1 hour ago | parent

Good luck trying send money abroad or dealing with a sudden unexplained account shutdown.

chinathrow 1 hour ago | parent

I have had no problem sending or receiving money abroad, thank you.

theplumber 1 hour ago | parent

yet

Dah00n 1 hour ago | parent

We are not all living in America, yet.

ameliaquining 37 minutes ago | parent

That's not really relevant; the U.S. government has enough leverage over the global (fiat) financial system that they can cause any account in any First World country to be shut down.

The actual reason to discount this is that account shutdowns are flashy rare events that reliably summon HN outrage, and so the kind of person who posts here overweights how likely they are, at least for people not on the margins of society. (If that weren't the case, the system wouldn't work and normal people wouldn't use it.)

akoboldfrying 1 hour ago | parent

Yes, but this threat analysis also holds for laptops and phones.

What do you use to access your bank account online? I use my laptop, or my phone.

kasey_junk 1 hour ago | parent

If your money is stolen from a bank account via fraud you have recourse to get it back, and it’s pretty straightforward to do in most cases.

SXX 1 hour ago | parent

Very often this is not the case. Debit / credit cards payments are quite reversible, but once a person send $100,000 or even $10,000 to a scammer it can be quite hard to recover.

lmz 1 hour ago | parent

Even banks find it hard to recover: https://en.wikipedia.org/wiki/Bangladesh_Bank_robbery

nkrisc 1 hour ago | parent

Because the scammers are instructing victims to use methods that are difficult or impossible to reverse, such as gift cards or cryptocurrency.

rwmj 42 minutes ago | parent

Don't buy gift cards and send them to random people would be a good rule to live by.

kasey_junk 1 hour ago | parent

Caused by an account take over? This is letter of the law stuff and something bank (and other financial firms) employees receive specific training on. The customers loss is capped and their bank is on the hook.

For inter-bank transactions involving a scam that causes the customer to “voluntarily” send money it depends on the rail. But US ACH rules cover reversals due to fraud and have pretty substantial rules about it.

SXX 18 minutes ago | parent

All the countries have rules about it. Except if your credentials been compromised it can take weeks before you find out that money gone from your account.

Gigachad 52 minutes ago | parent

Usually how it goes is if someone hacks your account or steals credit card info. You get refunded. If a scammer convinces you to willingly send the money, you’re out of luck.

embedding-shape 1 hour ago | parent

> Hardware wallets are not a solution to self-custody.

Nothing in this world tends to be "the solution", everything has tradeoffs.

Say you want to do self-custody, what is then the best option? "Don't do self-custody" obviously isn't the solution, as the core use case here is self-custody, so what in your opinion is a better way, than hardware wallets?

If there is nothing better today than hardware wallets, then for now, they are "one of the better solutions" for how to do self-custody, even with the current tradeoffs. But again, I'm eager to hear what the alternatives are.

ArtTimeInvestor 1 hour ago | parent

There is no solution yet.

From a bird's-eye perspective, 3 things are needed: Create a key, derive an address from the key, store the key.

Creating a key safely is possible with dice. You would probably create a seed phrase instead of a key directly, but for this discussion it is the same.

Deriving an address from the key is hard and I have not yet seen a good protocol on how to do it. I have read through a bunch of descriptions of how people do it and they are all weak and brittle. The most popular seems to be "I order a hardware wallet and follow the instructions that come with it". But even people who put a lot of thought into it come up with weak and brittle approaches. I would think there is a way to do it safely. But I have never seen a description of one yet. It might involve multiple computers, multiple software implementations and a hell of a lot of work to create a multisig that is not prone to a single attack vector.

Storing the key is probably the hardest. The most popular way seems to be to store it in a drawer or a safe. So now those coins are just as safe as a piece of gold would be. Or they use a multisig and store the keys in multiple locations. Quite painful. As you have the ongoing problem of keeping those locations accessible and safe at the same time.

nkrisc 1 hour ago | parent

Then can you give an example of what you would consider a solution, whether hypothetical or real?

mattmaroon 1 hour ago | parent

Using the banking system instead of crypto.

ArtTimeInvestor 1 hour ago | parent

There is none yet.

If there was one, someone would write down the steps necessary and put them on the internet. But I have never seen a sound description of how to self-custody Bitcoin in a safe way.

The hardest part seems to not even be the one that currently creates all those problems - the hardware and software used. The hardest part is storing the key (for example a seed phrase). If anyone says they know a way to safely store Bitcoin, my first question is: How do you store the key?

skinfaxi 22 minutes ago | parent

Where do you store your bank password? Couldn't the same be used for a seed phrase?

whywhywhywhy 1 hour ago | parent

Use a device that’s mass produced enough it can’t be targeted e.g a MacBook, then keep it airgapped and don’t do normal computing on it.

QuadmasterXLII 57 minutes ago | parent

airgapped pre crypto devices are extra safe: break out the ti82! don’t buy a ti82 for this purpose, it has to be one you had in your closet. If a blog post describes how to code it in TiBasic then affiliate links a calculator in ebay, well…

Gigachad 54 minutes ago | parent

Hardware wallets are air-gapped. The issue here was a distributor got acquired and then snuck a chip in that could read the spi link between the microcontroller and the screen. The chip had its own cellular modem and could send the passphrase that was shown on the screen to the attackers.

LoganDark 48 minutes ago | parent

Nobody said hardware wallets aren't air-gapped. They said take something normal and usual enough not to be an attractive target for bespoke crypto stealers, and then airgap that to make your wallet.

ameliaquining 46 minutes ago | parent

The post you're replying to is arguing that it wouldn't be feasible to do that with a MacBook (at least if you buy it off the shelf at Best Buy).

wongarsu 32 minutes ago | parent

If you sell a device specifically for storing large amounts of liquid assets, that puts a huge target on that device. You are basically asking for supply chain attacks

An ordinary MacBook does not have that issue. If you are a high-value target, you can further decrease your risk profile by buying it from a random physical store, further preventing targeted attacks.

alwa 28 minutes ago | parent

Boy that was a slog, to dig deep enough through the slop to find the technical details…

In retrospect @gigachad’s summary is worth as much as both articles combined, but for the Clauded technical source (with pictures!) that Ledger’s Claude-release refers to: https://www.tibane.net/research/ledger-nano-x-implant

fps-hero 1 hour ago | parent

Banks and payment providers (Visa Mastercard AMX) provide services beyond simply a store of wealth and a mechanism to transfer it.

Actually 2FA, hardware biometrics, behaviour based fraud prevention and personal confirmation of suspicious transactions. If you’re using credit they can refund fraudulent transactions, and there is the chargeback mechanism. This is probably banking system dependent, but in AUS there is a refund mechanism for mistaken/fraudulent traditional bank transactions.

BTC has effectively none of the safety net, and humans are fallible. We need the safety net. It’s the hugest barrier to adoption. Exchanges do a far better job of managing the risks than trusting your wealth to a hardware wallet.

ameliaquining 43 minutes ago | parent

The safety net makes you less secure against the U.S. government, but more secure against everyone else. That's the right choice for almost all users, but I still think it's at least kind of good that people have a choice.

motionlessveloc 37 minutes ago | parent

You sure about that last sentence?

https://de.fi/rekt-database

littlecranky67 19 minutes ago | parent

get a brand new, cheap laptop or machine (even a raspberry pi works) that you randomly pickup at the store (no delivery order). Install debian 13, install electrum, airgap the device, reboot and generate 1-of-2 your wallet keys.

The wipe the device, use any non-debian other linux (or BSD) to generated the 2-of-2 wallet key.

notyourwork 9 minutes ago | parent

The existing financial system which provides protection to consumers. Crypto doesn’t solve the problem the general public assumes it does and hype has inflated its value dramatically.

astverskoy 2 hours ago | parent

Crypto is a gift to scammers: billions stolen, victims left with little recourse, and no effective government oversight.

dgellow 1 hour ago | parent

And yet on this exact website people critical of the industry were ridiculed with the exact same rhetoric adopted by the AI industry. It was touted by so many as inevitable, and how we will all be left behind if we don’t join the cult

Neywiny 1 hour ago | parent

My gut reaction is that a hardware implant would be too costly so there's no way they'd actually do that but I guess when you can steal $92M, anything is possible. They could even fab an esoteric chip and still make a profit.

Shank 1 hour ago | parent

PCBWay will make anything you send them for reasonable pricing. Custom boards etc are not at all hard to manufacture, and for the amount of money you can get, of course you can team up with someone. I think the most people overestimate the cost of bespoke PCB creation.

solyin 1 hour ago | parent

Dangerous things sells implantable chips.

Eg. https://dangerousthings.com/products/apex-flex?Antenna=Narro...

dannyw 1 hour ago | parent

Why do you think it's too costly? It's well known that there are divisions in DPRK that are focused on generating $ through crypto hacks and compromises.

We're dealing with reasonably sophisticated state actors here in this dark forest; not script kiddies.

Cheap $5 PCB + programmable small FPGA is a very viable route too for hardware implants; but even a microcontroller / ESP32/etc will probably do.

kotaKat 7 minutes ago | parent

If you slide through and ignore the writing, the linked implant teardown is wild - https://www.tibane.net/research/ledger-nano-x-implant

They did, in fact, appear to mass-manufacture a custom-built flat flex implant with cellular (LTE-M!), eSIM, and everything that hid right inside the Ledger, sniffing the SPI reads to the display to read the recovery phrases it pukes out and send 'em over cellular to the ringleader.

It's an EXTREMELY well built implant. I'm impressed. Multiple revisions, even.

The money's too hot to not build shit like this and slip it into the stream. Even a few thousand in R&D netting a six figure ROI is worth it, getting millions is just the icing.

dauertewigkeit 1 hour ago | parent

Funny how all the rules of capitalism break down as you approach really big sums of money.

pjc50 47 minutes ago | parent

The #1 rule that you keep what you can get away with just seems to apply a lot harder. See also the Abramovich/Deloitte story on HN today.

Freeaqingme 1 hour ago | parent

I'm guessing the best way to go about self custody these days is to have a multi sig wallet, based on multiple hardware wallets from different vendors.

scrlk 1 hour ago | parent

I wouldn't trust any of the hardware wallet vendors. Pretty much all of them have had customer data leaks, resulting in wrench attacks.

You're better off just having a dedicated laptop for crypto transactions.

sunshine-o 55 minutes ago | parent

What always surprised me is there aren't many implementations of multisig for EVM based chains.

Actually the only one I know is the Gnosis Safe. Talk about creating a huge risk if it would have a problem.

wongarsu 27 minutes ago | parent

Hardware wallets have a huge target on their back. They are great for convenience, but once you are using multiple for muli-sig you can have more security with less hassle with an airgapped old laptop or a hand-stamped piece of metal you keep in a safe

whywhywhywhy 1 hour ago | parent

Can see why hardware wallets seemed a good idea at the time but history has shown this is a terrible way to self custody. Compromised devices aside, the KYC data leaks have put people in danger too.

jmakov 1 hour ago | parent

So HW passkeys in general can also be compromised?

postalcoder 51 minutes ago | parent

What a f-ing nightmare. It's stuff like this where I start to understand Apple's stance on right to repair. How do you maintain hardware security without strict provenance over every component in your device?

buckle8017 26 minutes ago | parent

The tweet doesn't say that ledger installed the chip.

This is some D grade trash writing.

woadwarrior01 24 minutes ago | parent

Ledger has had three data leak incidents: once in 2020, a software supply chain attack in 2023 and another data leak in 2026. This latest one is the fourth.

Even if one were to ignore the latest incident, which arguably isn't their fault, the first three incidents make up a pretty bad security track record.

How a French (EU based) company is still in business after all of this, is an indicator of selective enforcement of EU privacy laws (GDPR, etc).