Ledger hardware wallets compromised by supply chain implants

A major security breach involving tampered Ledger hardware wallets has resulted in estimated losses exceeding $90 million. Investigations suggest a highly organized criminal group compromised the supply chain by implanting malicious hardware components into devices. These implants, including cellular chips and SIM cards, reportedly intercept passcodes from device screens and transmit them to hackers via LTE connections, bypassing standard cryptographic protections.

While the Malaysian reseller CryptoBilis has been a primary focus of the investigation, Ledger is reviewing reports of similar implants found in devices purchased through other channels. The company has requested distributors in Southeast Asia and Hong Kong to halt sales while the investigation continues.

In response to the crisis, former Mt. Gox CEO Mark Karpelès has criticized Ledger’s communication and is developing a low-cost, open-source hardware detector. This device aims to identify unauthorized antenna components within wallets using radio frequency resonance testing, allowing users to check for tampering without dismantling the hardware.