According to Protos, Keystone will destroy nearly 19,000 customer wallets following the exposure of a device encryption key. The company confirmed that the key was inadvertently disclosed and is no longer under its control. As a result, Keystone plans to permanently erase all wallet data associated with affected devices.
The incident stems from multiple recent customer data leaks involving hardware wallet manufacturers, which can allow users to be targeted by phishing emails, personalized scams, or other malicious actions if sensitive authentication details are compromised.
Keystone has not disclosed the method of disclosure, timing beyond the current announcement, or technical specifics about how the key was shared. The company stated it is acting in accordance with security best practices to prevent further risk to user accounts.
Affected users will receive direct notification through official channels; no recovery options for the erased wallets are available at this time. Protos reported that the number of wallets impacted approaches 19,000 based on device registration records prior to the key breach.
