Under pressure Ledger unveils plan to turn its crypto hardware wallet into a smartphone

The compromised wallets allegedly contained hidden chips capable of intercepting users’ 24-word recovery phrases — the stream of random words that only the owner of the wallet should know as the ultimate safeguard to their digital assets — by reading signals from their screens.

The incident largely affected users in Southeast Asia, with Ledger citing research on Wednesday to show no loss of funds reported in Europe.

Ledger says Atom will incorporate additional protections specifically designed to counter this type of attack, a spokesperson told CoinDesk via email. The safeguards include a protective enclosure around the device’s most sensitive components, sensors that detect attempts to remove its screen or back cover and packaging designed to reveal whether it has been opened.

The tamper-detection system has its own battery to ensure it functions even if the device is switched off.

“The Core protection enclosure will explicitly block the screen reader implants from this weekend’s incident,” the spokesperson said.

Ledger plans to initially sell the device exclusively through its own website rather than through third-party sellers, in theory reducing exposure to distribution channels implicated in the CryptoBilis incident.

The company also said it has no plans to introduce trade-in programs for existing customers affected by the incident, though it does not rule out future upgrade promotions.