🔑Ledger’s Recovery Feature Sparks Community Backlash

The Defiant Daily

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Ledger faces scrutiny over its newly launched Recover feature, raising concerns about the exposure of private keys and potential security risks. Meanwhile, the SEC has responded to Coinbase's mandamus petition, signaling its intent to continue pursuing enforcement actions rather than providing clear regulatory guidelines for the digital asset industry. Finally, Lido deployed its v2 upgrade, introducing staked ETH withdrawals and taking steps to enhance decentralization of its validator set.

✍️ In today’s newsletter:

Ledger insists that its new Recovery tool doesn't compromise wallet security
SEC looks to shut down Coinbase's mandamus petition
Lido enables staked ETH withdrawals

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Hardware Wallets

Ledger’s New Wallet Recovery Feature Sparks Community Backlash

TLDR Ledger, a leading provider of hardware wallets, has introduced a controversial feature called Ledger Recover, allowing users to recover their seed phrases through identity verification. Community members and privacy advocates have criticized the feature, questioning its necessity and potential security vulnerabilities.

Ledger CEO Pascal Gauthier defended the feature as a crucial step towards broader crypto adoption.

SO WHAT The controversy highlights the ongoing debate over the balance between convenience and security in the cryptocurrency space. While the feature aims to provide users with a way to avoid losing access to their assets, it has drawn criticism for potential privacy and security risks.

Regulation

SEC Pushes Back Against Coinbase’s Request For Regulatory Clarity

TLDR Efforts by crypto advocates to obtain clear guidelines on US digital asset regulations faced a setback as the SEC responded to Coinbase's mandamus petition. The SEC contends that Coinbase is not entitled to extraordinary relief ordering the Commission to act on its pending rulemaking petition, arguing that a year's delay is not unreasonable.

SO WHAT The SEC's response further expands the uncertainty surrounding digital asset regulations in the US. The SEC's emphasis on enforcement rather than rulemaking adds to the regulatory ambiguity, which the industry says is hindering innovation and growth.

Liquid Staking

Lido Enables Staked ETH Withdrawals With V2 Rollout

TLDR Lido, the leading DeFi protocol and Ethereum's largest staking entity, has deployed its v2 upgrade, which introduces staked ETH withdrawals. Users have already requested to withdraw $80M worth of stETH. The upgrade also introduces the Staking Router, allowing a wider range of users to apply to operate nodes and bolstering decentralization.

SO WHAT Lido continues to face scrutiny and criticism for its perceived centralization and concentration of staked Ether. The competition with Rocket Pool and the potential introduction of stETH perpetual contracts by Synthetix highlight the evolving landscape of liquid staking and the growing interest in staking derivatives.