Ledger said a covert chip hidden in some hardware wallets sold by reseller CryptoBilis captured users' 24-word recovery phrases from the device screen and sent them to attackers over an LTE mobile network using an eSIM. The implant did not modify the secure element, the operating system, or any transactions and signatures, so Ledger describes it as a physical supply-chain attack rather than a breach of its software or systems. Ledger has confirmed one affected signer with an unauthorized implant and says all confirmed losses in the Oct. 9 incident involved CryptoBilis-sold devices, while it is still examining reports in other devices and locations. Onchain researchers estimated losses of up to $93.2 million across more than 300 wallets, and Tether froze $10 million of USDT tied to the theft. CryptoBilis has stopped selling Ledger signers, and customers who already used one should move assets to a device with a newly generated recovery phrase.
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