Hardware security specialist Joe Grand, known by the alias Kingpin, presented a full breakdown of a spy chip found inside a counterfeit Ledger Nano X at the Hardwear.io 2026 conference in Santa Clara. The device originally surfaced in 2021 — Reddit users complained of receiving wallets with foreign electronics inside, and the devices themselves reached victims through the Ledger 2020 data breach and subsequent phishing campaigns.
How the Implant Reads the Seed Phrase
According to Grand, the implanted board connects to the internal SPI bus, which the Nano X's Secure Element uses to transmit data to the device's OLED screen. The implant intercepts this traffic and, using a built-in pattern recognition mechanism, matches the transmitted data with letter images — thus "reading" the words the owner sees on the screen during wallet generation or recovery. The extracted seed phrase is saved in the chip's flash memory and then transmitted to the outside world — not via Wi-Fi or Bluetooth, but over a fourth-generation cellular network, for which the implant contains its own modem and eSIM.
To fit the additional electronics inside the case, the attackers reduced the battery size and replaced the standard thermistor with a fixed resistor — this allows the charge indicator to always show 100%, masking the tampering with the design.
Not the First Case with Hardware Wallets
Grand reminded that such supply chain attacks have affected not only Ledger. Previously, a similar scheme was identified with Trezor One and Trezor Model T — in these devices, the original locked microcontroller was replaced with an unlocked version containing malicious firmware that generated not random, but pre-determined seed phrases known to the attackers. Counterfeit devices were sold through Russian marketplaces.
Compromise occurs at the sales stage — the buyer receives a physically altered device instead of the genuine one
Externally, such wallets are almost indistinguishable from real ones — only minor assembly details reveal the counterfeit
Data is stolen not via the USB interface or application, but through a hidden communication channel independent of the victim's computer
The researcher noted that new modifications of the implant have already been detected — meaning the attackers continue to refine the scheme. As a next step, Grand plans to intercept and decrypt the cellular traffic exchanged by the chip to learn more about who is behind the attack and how successful it has been.
What Ledger Recommends
The company recommends that owners compare the device's appearance with reference photos and buy wallets only directly from the manufacturer or authorized resellers, not through marketplaces and intermediaries. Ledger also stated they are considering additional physical protection measures for future products.
The question remains open as to whether the infected device passed the standard Secure Element authenticity check when connected to the Ledger Live application — this point is not covered in Grand's presentation. Judging by the described attack mechanics, the implant passively intercepts data on the SPI bus between the secure element and the screen, without interfering with the chip itself, so the verification could have proceeded independently of the spy module's operation.
The story of the implant in the Nano X shows that the risk affects not the software part of the wallet, but the physical supply chain itself — from the factory to the buyer's mailbox. Even a correctly working application and a genuine screen do not guarantee the absence of foreign electronics inside the case.
Ledger hardware wallets are freely sold on Russian marketplaces.
AI Opinion
From the perspective of machine data analysis, the story of the implant in the Ledger Nano X is just one facet of the broader issue of trust in hardware wallets. The vulnerability here affected the physical channel for transmitting the seed phrase via the SPI bus, but a similar effect in terms of consequences is also caused by a firmware-level defect: in the Coldcard wallet, a five-year-old bug in the random number generator led to predictable keys and losses amounting to hundreds of millions of dollars. The situation demonstrates that the protection of the seed phrase relies not on a single link — the chip manufacturer, supply channel, or firmware code — but on the entire chain simultaneously.
A technical aspect that remains outside the article's field of view is the independent verification of the Secure Element's integrity when connecting to the Ledger Live application. How reliable is such a mechanism against a passive interceptor that does not interfere with the chip's own operation?
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