Former Mt. Gox CEO Warns Altered Ledger Devices Could Expose Wallet Recovery Phrases

Former Mt. Gox CEO Mark Karpelès warned that altered Ledger devices could expose wallet recovery phrases. A possible connection to subsequent transfers from multiple wallets has not been established.

Karpelès warned on Oct. 8 that counterfeit or modified Ledger devices could contain hidden SIM cards designed to transmit recovery phrases displayed during wallet setup. He said the implant could intercept information sent to the device’s screen.

The warning focused on physical tampering rather than a weakness in cryptographic algorithms. Karpelès said he examined an affected device from Malaysia that retained intact shrink-wrap packaging but contained a hidden implant beneath the screen.

Karpelès said the suspected devices could still pass Ledger’s authenticity checks if their original security components remained intact, because the checks would not detect unauthorized physical modifications.

A possible connection between Karpelès’ warning and subsequent wallet transfers has not been established. The incident highlights the risk that compromised hardware can undermine self-custody even when a device appears genuine.