The controversy surrounding crypto hardware wallet firm Ledger over its new Recover service continued to play out over the weekend, with comments from the firm’s co-founder further amplifying concerns.

Éric Larchevêque, who co-founded Ledger in 2014 and served as CEO until 2019, expressed his personal views on what he described as “a PR disaster” on a Reddit forum.

“I don’t have all details, but for sure something went wrong and the Ledger Recover service was put in your face in the worst way possible,” he said.

In his view, while the abrupt launch of the service did more harm than good, it also set right several misplaced assumptions about how hardware wallet firmware actually works. The reality is that no changes were made to Ledger’s security model, he said, but rather many users realized that trustlessness is not as nuanced as they had originally thought.

When one user enquired about the possibility for the government to access user funds stored through Ledger Recover, Larchevêque admitted that it was theoretically possible.

The Recover service works by splitting an encrypted version of the user’s private keys into three fragments and storing them with three different parties on cryptographically secure Hardware Security Modules.

A screenshot of the Reddit thread posted by “@NFTHerder” on Twitter shows the former Ledger CEO confirming that the government could freeze user funds if the third parties safeguarding the encrypted seed phrases were subpoenaed.

“This answers my biggest technical questions around Ledger Recover, and means that Ledger has your seed phrase decryption key, not you. That means Ledger has 1 shard and your decryption key, requiring only one other of their financial partners to collaborate to steal/seize funds,” wrote Twitter user “@sethforprivacy,” who was on Unchained last Friday.

Not only does this mean that funds held via Ledger Recover would not be protected from government seizures, but it also leaves them vulnerable in the event that Ledger is hacked, he explained.