The Ledger Nano X Spy Chip: What We Know

Hardware wallets exist for one reason. They keep the keys to a person’s crypto away from computers and phones that can be hacked. The Ledger Nano X is one of the best known devices in that category, which is why the events of the past few weeks have gotten so much attention. Researchers have shown, and Ledger itself has now confirmed in at least one case, that some Nano X units were opened before they reached the buyer and fitted with a small extra circuit board. That board watches the screen during setup, reads the recovery phrase as it is displayed, and sends it to an attacker over a cellular connection.

This article covers how the implant was found, what hardware security researcher Joe Grand learned when he took one apart, what Ledger has publicly said so far, and what it means for anyone who owns or plans to buy a hardware wallet. The story is still moving, and everything below reflects what was public as of October 14, 2026.

How a Battery Swap Exposed It

The first discovery came by accident. A man living in Thailand had a Nano X with a dying battery. Rather than pay for a full replacement device, he went online and bought the cheapest used Nano X he could find, planning to take the battery out of it. When he opened the unit, the battery was smaller than it should have been, and a small green circuit board sat beside the original black Ledger board, connected by a bundle of thin wires. A short antenna was attached to it.

He posted about it on Reddit in August 2025 and was met with a lot of disbelief. He also told Grand that the police in Thailand showed no interest. Eventually he sent the device to Grand, who is a well known hardware hacker and has spent years teaching people how to find weaknesses in electronics. Grand has said that a real hardware implant found in a consumer product in the wild is something the security community rarely gets to see, so he took the case.

Grand wanted more samples to work with, so he went looking on the same Thai marketplace. He found a legitimate authorized Ledger reseller, along with a number of sellers using names that were close copies of it and claiming to be genuine. Anyone sorting by lowest price could easily land on one of the lookalikes. He bought three devices from them. The packaging looked right, the shrink wrap was clean, and nothing on the outside gave anything away. All three had implants inside. Some later orders from the same sellers came back clean, which Grand said might be luck or might be the sellers mixing things up.

What Grand Found Inside

Grand presented his findings at the Hardwear.io USA 2026 conference, and the full talk is on YouTube (link below). The work is a good example of patient, step by step reverse engineering, and the main points are these.

The design problem the attackers faced. The Nano X keeps the private keys inside a secure element, and that same chip also controls the buttons and the display. Earlier Ledger models let a less secure chip handle the screen, which opened a door for attackers, and Ledger closed it. With the Nano X there was no easy way to change the firmware without tripping Ledger’s checks. So whoever built this implant went around the problem. They did not attack the secure element at all. They tapped the wires that carry data from the secure element to the screen.

The physical build. The extra board was held down with epoxy, which Grand softened with acetone to remove. The attackers had fitted a smaller replacement battery to make room, and they added a few components to keep the Nano X behaving normally. A fixed resistor stands in for the temperature sensor the original battery had, and the fuel gauge was set to make the system think the battery is always full. The implant board even had its connection points labeled, which made Grand’s job easier. He traced the wires and confirmed they connected to the display data lines, the same lines the secure element uses to send images to the screen.

The cellular module. Grand first suspected a cheap radio transmitter and found no signal with a spectrum analyzer. He then found that a pin on the board put the implant into a mode where it appeared as a USB device with three virtual serial ports. One of them printed readable text that included a chipset name and a device identifier, which showed the implant was not a simple radio at all. It was a 4G LTE cellular module of the type used for machine to machine communication, built around the Air700E module from a Chinese company called Luat.

The microcontroller. The small chip that does the thinking had no markings, and Grand never identified the manufacturer. It did not matter. The debug interface was open with no code protection, and the chip identified itself as an ARM Cortex M0. Grand pulled out the entire 32 kilobytes of program memory and the 8 kilobytes of working memory. Using the dump, and some help from AI tools to speed up the analysis, he found a routine that looks for 26 characters, which is the alphabet, and a storage area in flash memory that held letters.

The eSIM. The chip near the microcontroller that Grand first took for flash storage turned out to be an eSIM, which is a SIM card in chip form. He removed it, mounted it in an adapter, and read it with a standard smart card reader and a SIM tool. It showed the SIM had originally been registered in the Netherlands through Vodafone, carried a data only plan, and had last connected to networks in the Philippines and the United States. The United States connection was Grand’s own home, where he had been powering the device on the bench.

How it all fits together. Put together, the picture is simple. During setup the Nano X shows the 24 words of the recovery phrase one at a time on the screen. The implant watches the display data, recognizes the letter shapes as they pass by, stores them in memory, then moves them into flash, and eventually sends them out over the cellular link. With the recovery phrase in hand, the attacker can rebuild the wallet on any device and empty it whenever they like, without ever touching the original hardware again.

Grand also said he contacted Ledger before presenting. Ledger had already seen some of these devices, the two sides shared information, and Ledger is working on further protections. He relayed a comment from someone at the company that the design is strong enough that watching the screen connection may have been the only workable route left for an attacker. Grand was clear that he is interested in the technology and not in hunting down the people responsible.

Earlier Cases of Tampered Wallets

This is not the first time wallet buyers have been targeted through the supply chain. Grand’s talk covers a few earlier examples. Modified Trezor devices turned up on Russian marketplaces with the original microcontroller replaced by one running altered code, so that the wallet handed out recovery phrases the attacker already knew. In 2020, after a Ledger customer database leaked, some of the people on that list received unsolicited packages containing a device and a letter claiming to be from the company’s CEO. Inside the device was a USB drive added by the attacker, and running the program on it asked the victim to type in their recovery phrase. Both cases show how much effort criminals will spend when the payoff is a wallet.

From Research Curiosity to Active Incident

For a while the Nano X implant looked like a niche finding. That changed this autumn. Mark Karpelès, the former CEO of Mt. Gox (whose exchange collapse we covered in When Exchanges Go Down), runs a research outfit called Tibane Labs, and had been posting photos of implants he found in Ledgers bought on third party marketplaces. On September 16 he shared images comparing an older implant with a newer one. His research page says the two units he examined came from Yahoo Auctions in Japan and from a China based seller on Amazon Japan that shipped from Malaysia. Tibane Labs has described three generations of the implant, with the later ones looking more polished and mass produced.

On October 9, Ledger Support posted a warning that it was investigating reports of lost funds from users who bought devices from CryptoBilis, a reseller operating in Indonesia, Malaysia and the Philippines. Ledger asked anyone who bought from that reseller in the previous 90 days not to set up the device, and said those who already had should move their assets to a new Ledger device with a new recovery phrase. The next day Ledger confirmed that one affected user’s device contained an unauthorized hardware implant. Blockchain analysts began counting stolen funds. Bitquery’s tally reached roughly $93 million from 315 wallets by October 11 and about $102 million from 324 wallets by October 13. Another investigator, known as Specter, had earlier put the figure above $86 million. Ledger has been careful to say these numbers come from third parties and that it has not confirmed the total number of affected users or the amount lost.

Reports have since come in from other places. MediaMarktSaturn, the German electronics retailer, pulled Ledger devices from its stores and websites after a customer in Germany reported an implant. Ledger said it agreed with the decision and that no loss of funds had been reported in that case. Karpelès also said he confirmed an implant in a Ledger Flex bought at an airport in Singapore, though that is his own finding and Ledger has not said it verified the device.

What Ledger Has Said

Ledger’s public statements have followed the investigation closely, and the company has kept most of its claims narrow.

It confirmed one implanted device on October 10, and on October 11 said the number of impacted devices is limited and that all confirmed cases involved devices sold through CryptoBilis. It said it was working with relevant authorities, including the SEAL 911 security group according to press reports, and that it had no indication that Ledger’s own systems or services were compromised. It also said there was no indication that devices bought on Ledger.com had been tampered with.

On October 13, Ledger’s Donjon, which is the company’s in house security research team, published a technical description of the attack. It said the implant sits inside the enclosure and reads the data shown on the screen, decodes the recovery words when those screens appear, and sends them over LTE using a provisioned eSIM. The company stated that the implant “does not modify the Secure Element or the Ledger operating system,” and does not alter transactions or signatures. That description lines up closely with what Grand and Tibane Labs documented independently.

Later that day Ledger asked resellers and distributors across Southeast Asia and Hong Kong to suspend sales and take stock off shelves while the work continues. The countries listed were Indonesia, Singapore, Thailand, the Philippines, Vietnam, Malaysia and Hong Kong. Ledger said the only confirmed incidents remain in Southeast Asia and that it has not verified a drain linked to a device bought elsewhere. CEO Pascal Gauthier said the company still does not know who tampered with the devices or where in the distribution chain it happened, and that Ledger is reviewing controls for both its direct sales and its resellers. CryptoBilis has stopped selling hardware wallets while the investigation continues.

Ledger has also been direct about the limits of its own authenticity test. The Genuine Check confirms that the secure element and its software are real, and Ledger has said it cannot detect physical changes to the hardware around an intact secure element. That is why a tampered device can arrive in clean packaging and pass the check. Ledger publishes a guide for opening and inspecting a device, with a warning to back up the recovery phrase first because opening a device can damage it. The company has also told victims to contact Ledger Support and local law enforcement and not to send a suspect device to anyone or open it before doing so.

Keeping It in Proportion

Several things in this story are worth holding side by side. The secure element, the chip that actually protects the keys, was not broken. According to Ledger and to the independent researchers, the implant never touches it. The attack depends on the recovery phrase being displayed during setup on a device the attacker had already modified, which means it only works when the tampering happens before the owner receives the wallet. A Nano X bought directly from Ledger shows no sign of this problem so far.

At the same time, the reporting makes clear that buying from an authorized reseller does not remove all risk, since CryptoBilis was on Ledger’s list of authorized sellers. Some of the questions that matter most are still unanswered. Nobody has said how many devices were modified, who made the implants, or at what point in the supply chain they were installed. Karpelès has speculated that the implant is a manufactured product sold to someone who installs it before resale, but that is a guess and not a finding.

Karpelès, who has handled more of these devices than almost anyone, has said the discoveries have not changed his trust in Ledger hardware. He argues that the devices being easy to open and examine is one reason the implants could be found at all. Other wallet makers have reacted too. Trezor said it is reducing its number of resellers so it can check them more closely, and OneKey said it ended CryptoBilis’s authorization.

What Owners and Buyers Can Take From This

Ledger’s guidance is consistent and fairly simple. The device itself should generate the recovery phrase, and the owner should write it down. Ledger’s setup guidance has long said a new device should never arrive preconfigured, and CryptoBilis posted the same warning on its own site: a device that comes with a recovery phrase already printed or written on a card should be treated as unsafe. Ledger tells buyers to purchase from Ledger.com or an authorized reseller and to avoid marketplace sellers with lookalike names, where Ledger says the risk of getting a modified or counterfeit device is high.

Anyone who bought from CryptoBilis and has not set up the device should leave it in the box and contact Ledger Support. Anyone who has set one up should move funds to a new Ledger device with a brand new recovery phrase and never restore the old phrase onto anything. A recovery phrase that has been exposed stays exposed. Ledger has also warned that scammers are likely to use the news to pose as support staff, and that Ledger will never call, message, or ask for the 24 words.

If you are new to hardware wallets and want the basics of how seed phrases and wallets work, start with What Is Crypto? Part Three: Wallets.

Grand ended his talk on a point that applies well beyond Ledger. Hardware espionage used to be a story about governments spying on each other, and it has now reached consumer products. Wallets will keep being targeted because the reward is large and the victims are often new to crypto. The hardware inside a device and the route it took to reach the owner are part of its security.

Watch the Talk

Joe Grand’s full presentation, Reverse Engineering a Ledger Nano X Hardware Implant, is available here: Watch on YouTube

This article is for informational purposes only and is not financial, legal, or security advice. It names private companies and individuals based on public reporting and statements available at the time of writing, and the situation is developing. Details may change as the investigation continues. Readers should rely on official Ledger channels for current guidance and do their own independent research before making decisions about their funds.