Spyware chip found in Ledger crypto-wallets

This newsletter is brought to you by cloud security firm Prowler. You can subscribe to an audio version of this newsletter as a podcast by searching for "Risky Business" in your podcatcher or subscribing via this RSS feed. You can also add the Risky Business newsletter as a Preferred Source to your Google search results by going here.

Ledger, a maker of hardware-based cryptocurrency wallets, has told customers to discard and replace devices bought from a Southeast Asian reseller named CryptoBilis.

Customers were also told to move funds stored on those wallets to new blockchain addresses as soon as possible, to avoid having the funds stolen.

The company's warning came after blockchain security firm Tibane Labs published a report over the weekend detailing spy chips found inside Ledger Nano X wallets over the past year.

The spy chips were found soldered between the cryptographically secure element that handles cryptocurrency operations and the device's screen.

The add-on chip intercepted what was displayed on the screen, matched the characters against a character map, and sent the collected information to a remote attacker using a built-in modem and eSIM card.

The threat actors allegedly used the collected seed phrases to access and empty cryptocurrency accounts stored on the Ledger devices.