DO NOT Update your Ledger, and consider moving to a different cold wallet

The most recent Ledger update allows for a new Recovery feature. This feature enables you to send your seed in shards to different custodians for later recovery.

It is obvious that this is a problem. The fact that Ledger with a firmware update is even able to share your private keys is a massive red flag.

I would not consider Ledger secure anymore. Just a heads up.

Edit: for people wanting sources and official statements, this is the comment thread from the Ledger Co-Founder. Should not convince anyone.

https://www.reddit.com/r/ledgerwallet/comments/13itm7u/is_there_a_backdoor_yes_or_no/jkbyyfp/?utm_source=share&utm_medium=ios_app&utm_name=ioscss&utm_content=1&utm_term=14&context=3

Edit 2: it does not matter if the update can be skipped or if the feature is subscription only and you don't need to use it. The problem is that the secure element is hot.

Edit 3: Ledger has pulled the update and likely cancelled the entire thing. https://www.nobsbitcoin.com/ledger-to-launch-kyc-cloud-based-recovery-service/. ATTENTION: this might not solve anything. Even if there is no active firmware leak, we know that the secure element is able to transmit the seeds, and this is a vulnerability until proven otherwise.

Edit 4: To be fair and transparent, there are some explanations of how the Recovery tool worked and how it shared the seed. Read it and see if you are comfortable with it. https://support.ledger.com/hc/en-us/articles/9579368109597-Ledger-Recover-FAQs?docs=true