Ledger is one of the leading manufacturers of secure hardware wallets for storing cryptocurrency. Similar to other brands, Ledger provides a secure method of holding cryptocurrency for long periods of time.
Hardware cold wallets protect your crypto by securing your recovery phrase and keeping your wallet disconnected from the Internet. However, for more robust security, you’ll have to sacrifice ease of use as compared to other types of wallets.
Trading the crypto stored on your Ledger involves more steps than a hot wallet, and if you lose your recovery keys, there is little recourse for data recovery; your data recovery options depend on how you originally secured your wallet.
Additionally, securely storing your recovery phrase is of the utmost importance — if your phrase is lost, so is your crypto. So keep reading to learn how to properly secure your wallet and what your options are if you lose your keys.
What is a Ledger Wallet?
A Ledger Wallet can be any of the wallets manufactured by Ledger. These cold hardware wallets are designed for secure, long-term storage of cryptocurrency. Using a cold wallet means that your funds won’t have any access to the Internet, which prevents them from being transferred.
Additionally, the hardware wallet has a seed recovery phrase which is required to access your funds. Securely storing this phrase is crucial to preventing your Ledger hardware wallet hacked.
Ultimately, you are responsible for securing your funds with a Ledger wallet. This responsibility includes properly storing your recovery phrase and protecting it from being obtained by a bad actor. We’ll discuss a few practical ways to secure your Ledger wallet below.
The Importance of Ledger Data Recovery
What do you do if you have your Ledger wallet hacked? One of the primary security measures of Ledger wallets and other brands of hardware wallets is placing the sole responsibility of securing recovery keys onto you. Unfortunately, this means the only ways to recover access to your wallet depend on how you initially secured your recovery phrase.
However, if someone has hacked your wallet, they will likely transfer your funds, creating a trail. You may not be able to recover the original wallet. Still, you might be able to recover the stolen funds that were transferred away from it by working with an agency like Lionsgate to recover lost cryptocurrency.
The right agency will have an ideal blend of blockchain expertise, cyber intelligence, and legal expertise to connect blockchain identities with real-world identities. Combined, it may be possible to reclaim the funds stolen from a compromised wallet.
If you’ve completely lost your keys, rather than being the victim of a hack, your options will depend on how you’ve secured your wallet. A crypto recovery agency may still be able to help, but it will depend on the information you still have and how you back up your keys.
Best Practices for Securing Your Ledger Wallet
There are several ways to secure your Ledger Wallet. These methods depend on securely storing your seed phrase, which can be used by someone else to gain access to all your funds stored in the wallet.
You don’t need to use each of the following best practices — you can pick and choose the right options for your needs. Generally speaking, there is a trade-off between ease of use and security that you need to keep in mind when securing your wallet.
Use Ledger Recover
You can use the new and controversial feature known as Ledger Recover to store your seed phrase remotely for a recurring subscription. The phrase is encrypted, split into three sections, and stored by three separate companies.
While worth considering, many have criticized this feature for going against the purpose of a hardware wallet, which is to prevent your keys from never leaving the device. The companies storing sections of your phrase could potentially decrypt and combine these sections. While challenging and unlikely, it’s not impossible.
However, using Ledger Recover creates additional recourse should your seed phrase be lost. You’ll use a simple online portal to recover and decrypt your phrase, and from there, you can restore access to your funds.
Split Up Your Recovery Phrase
One option to consider is writing down your recovery phrase on three separate pieces of paper (or metal plates, which we’ll discuss below) and storing them in different places. Someone will need to acquire all three pieces of paper to recover your wallet.
You can also split it up into two pieces, or six pieces — whatever works for your balance between security and ease of use. The more you split it up, the more likely it is you may also lose one of the pieces of the phrase.
This tactic mimics the Ledger Recover feature but sidesteps, entrusting your keys to three companies. Instead, you’re responsible for securing each section of the recovery phrase, such as securing one piece in your wallet, another in a safe, and another hidden in a book.
Use Encryption When Digitizing Your Recovery Phrase
Many crypto users digitize their recovery phrases in plain text, which means anyone who finds the file can restore your wallet and have access to your funds.
Instead of inviting this added risk, use open-source encryption software to encrypt it. You’ll still need to store the encryption key to decrypt the phrase in the future, but the key by itself isn’t as damaging as the entire recovery phrase in plain text.
Explore different encryption methods that are within your technical expertise to use effectively. You can use freely available tools (depending on your OS) and encrypt your recovery phrase before storing it, provided you then properly secure and store the encryption key.
Engraved Metal Plate
One method for storing your Ledger recovery phrase is engraving it on a metal plate. This option replaces writing it down on a piece of paper since paper can be burnt, pens can smudge, and many other factors can make it unreadable.
With a metal plate, you have a fireproof and overall more resilient way to store your recovery phrase. Your phrase is engraved on the plate, and then it’s up to you to securely store it.
However, don’t use any service that requests your recovery phrase and then engrave it for you — that defeats the entire purpose. You should never send anyone your recovery phrase, even if you think they’re trustworthy.
Instead, there are kits you can buy that come with a simple engraver, allowing you to engrave it yourself. You can find these kits on Amazon and other crypto-focused eCommerce sites. The kits typically include a few plates and an engraver, so you can store multiple phrases with this method.
Memorize Each Word
Memorization is an excellent way to ensure Ledger or Bitcoin key recovery. Of course, the challenge is memorizing a 12 or 24-string of unrelated words — it won’t be as simple as memorizing a sentence.
Yet, for those who are skilled with memorization, it’s well worth taking the time to commit your Ledger recovery phrase to memory.
However, we advise still using one of the above methods in tandem with memorization. Forgetting one word, or transposing the position of two words, can make it impossible to recover your wallet. Memorize your key as a fallback method rather than your sole data recovery plan.
What to Do in Case of Data Loss
You’ve lost your recovery keys and can no longer access your Ledger wallet — what can you do next?
If you’re not using Ledger Recover, the company won’t be able to provide you with your lost keys. You are responsible for storage and security with a hardware wallet, and lost keys can often mean a permanent loss of the funds stored in the wallet.
However, an agency like Lionsgate, which specializes in cryptocurrency recovery, might be able to help. There may be additional avenues to explore, depending on how you secure your Ledger originally. It’s worth contacting a wallet recovery agency for a consultation to see if they might be able to help.
The lack of options for restoring your wallet after data loss is why it’s vital to secure your recovery phrase using the methods discussed above. Additionally, you can use several of these methods in tandem to have some redundancy in case one method fails.
Work With Lionsgate for Wallet Recovery Services
Ledger wallets provide multiple benefits that have made them one of the most respected hardware wallets on the market. However, the tradeoff between security and ease of use makes it crucial for you to properly secure your recovery phase so that any future data recovery is simple and straightforward.
Recovering your lost phrase is extremely difficult but not impossible. Working with a wallet recovery agency can help explore more avenues for helping uncover the forgotten recovery phrase. Additionally, if your Ledger wallet was hacked and funds were transferred away, recovery agencies can also help track down and reclaim stolen cryptocurrency.
Lionsgate is one of the leading cryptocurrency recovery agencies, and we’ve helped clients restore lost wallets and reclaim stolen funds. Our teams of blockchain analysts, legal experts, and cyber intelligence professionals might be able to help restore your lost funds.
Do you need to restore a hacked Ledger wallet or with a lost recovery phrase? Reach out to Lionsgate today for a consultation so we can learn more about your case and see if we can help.