Making Magic: Quantum Updates and Security On-Chain

Yeah, certainly.

So on October 9th, Ledger confirmed that users were reporting loss of funds on Ledger devices.

Ledger also confirmed that all of these sources from these loss of funds report originated from the same reseller of Ledger hardware devices, CryptoBillis, which is a Southeastern Asia-based reseller.

Ledger didn't say exactly what was going on, but advised that any users that had purchased from CryptoBillis move their funds to a new wallet, and if they hadn't initiated the wallet, to not initiate the wallet.

About a week later, Ledger was able to confirm that those wallet devices actually had an eSIM installed on the wallet device that would use LTE upon wallet initiation to transfer the seed phrase over the network so that an attacker could then move the funds.

So essentially moving the private key material to an attacker using this installed spyware.

There are a couple other reports coming out that are unconfirmed that potentially other ledger devices in Germany may also have been discovered with spyware, but these are all unconfirmed at the time.

And I think what's important to note here is that the actual secure element of the ledger device, which is the main element of the wallet, very technically difficult to produce.

It functioned as expected.

It works.

That secure element was not compromised.

So the overall integrity of Ledger wallets was not compromised.

But somewhere along in the supply chain, these spyware devices were installed.

So users that were affected right now, losses estimate about $86 million.

This is also coming off the back of a cold card exploit where users lost over $100 million.

And it's a very interesting trend that I think we can discuss a little bit more in that throughout the history of crypto, we've seen smart contract exploits really centered around software bugs.

But these are the two biggest and main stories around hardware wallet exploits.

Now,

in both cases, the secure element was not affected.

It was a different vulnerability.

But it speaks to the broader supply chain around wallets and some of the risks that were introduced there.

So certainly a very sad story for users that were affected.

And also very surprising seeing that hardware wallets have been affected in now two instances.

Certainly not something I expected for the year of 2026.

It's definitely tough to see.