For millions of cryptocurrency and XRP holders, hardware wallets have historically served as the gold standard for asset security. That confidence was severely shaken on October 9, prompting a prominent community figure to act swiftly to clarify the situation.
Dom Kwok, co-founder of EasyA, issued a direct security alert to hardware wallet users via social media. He cautioned, “if you buy a hardware wallet online, remember: you must always generate your own seed phrase. If your wallet comes with a pre-filled seed phrase, it’s compromised, and you should not use it.”
What Happened to Ledger
More than $90 million was reportedly stolen from Ledger hardware wallet users throughout Southeast Asia. Investigators connected the thefts to customers who bought their devices via CryptoBilis, a reseller active in Malaysia, Indonesia, and the Philippines.
In response, Ledger suspended all sales through CryptoBilis pending an investigation. Investigators suspect a supply chain breach where the hardware was intercepted and modified prior to delivery, ensuring the threat actors possessed the seed phrases before the victims initialized the devices.
Kwok’s Warning
Kwok’s advisory highlights the mechanism behind this suspected exploit. Acting as the ultimate master key to any crypto wallet, the seed phrase grants absolute control to whoever holds it. Dishonest resellers can supply hardware that already includes a pre-recorded seed phrase, tricking unsuspecting buyers into surrendering their funds the moment a deposit is made.
Addressing a common concern raised by a community member who purchased directly from an official manufacturer website—specifically, why a device generates its own seed phrase during setup—the distinction lies in authentic behavior. Genuine hardware generates a fresh, randomized seed phrase locally on the device during the initial setup process, ensuring that only the user ever views it.
The Alternatives Gaining Attention
In the wake of the incident, community members highlighted Tangem and Xaman as alternative options. Each serves distinct functions. Tangem functions as a credit-card-shaped hardware wallet utilizing NFC technology and completely eliminates seed phrases, as private keys are created and housed directly on the card to neutralize the type of vulnerability that impacted Ledger users.
Meanwhile, Xaman operates as a software wallet tailored for the XRP Ledger. Because it keeps keys on a smartphone instead of dedicated hardware, it is geared more toward frequent transactions rather than long-term cold storage. Additionally, Xaman provides an NFC card add-on powered by Tangem hardware to introduce an extra physical security layer.
Kwok’s guidance remains straightforward and accessible: always create your own seed phrase, and never use a device that supplies one in advance. As malicious actors utilize increasingly sophisticated methods, investors must maintain heightened vigilance.