Ledger CEO and Mark Karpelès Spar Over $90M Hardware Wallet Thefts

The confrontation began on October 17 when Karpelès criticized the manufacturer for failing to alert users about physical implants that capture 24-word recovery phrases. While Karpelès initially claimed the company remained silent on the issue, he later acknowledged a March security guide that covered general tampering risks. He argued that burying technical warnings in an educational section was insufficient to protect consumers from the sophisticated hardware modifications discovered in CryptoBilis devices.

Gauthier dismissed the critique, urging Karpelès to stick to verifiable facts rather than speculation. The exchange turned personal when the Ledger executive referenced the 2014 collapse of Mt. Gox, telling his critic that he was no "white knight" in matters of exchange security. Karpelès countered that his history with a major exchange failure provided him the perspective to demand better communication from firms managing customer assets.

At the heart of the technical problem is the limitation of Ledger’s "Genuine Check" feature. The system verifies the cryptographic signature of the device's security chip but cannot detect unauthorized hardware added to the casing if the original components remain intact. In the CryptoBilis incidents, attackers installed cellular-enabled components that intercepted recovery phrases during setup. Ledger has since halted sales through the reseller, though the final tally of stolen funds remains subject to investigation and dispute.