Tangem Secures Patent For Private Key Backup Technology

According to Cointelegraph, self-custodial cryptocurrency wallet provider Tangem has been granted a United States patent for its innovative private key backup technology. The United States Patent and Trademark Office (USPTO) issued the patent on January 28, 2025, for a system titled "Systems and Methods for Transferring Secret Data via an Untrusted Intermediary Device." This technology is designed to enhance the security and usability of self-custodial wallets by facilitating secure private key transfers between wallet hardware and devices such as smartphones. Self-custody in cryptocurrency refers to the independent storage of crypto assets, allowing users full control over their assets through a private key or seed phrase. However, this method is susceptible to risks like theft or loss of private keys, posing a significant challenge to widespread adoption. Tangem's patented technology aims to mitigate these risks by enabling users to benefit from self-custody without directly handling the private key. Instead, it creates backup authentication devices that incorporate features such as a seedless backup process, end-to-end encryption, trustless intermediary transfer, and tamper-proof authentication. The technology employs cryptographic techniques like Elliptic Curve Diffie-Hellman (ECDH) for private key exchange and key derivation functions. Tangem's backup technology involves transmitting the private key as secret data between two trusted devices, such as a Tangem card or ring, via an untrusted intermediary like a smartphone. Andrey Lazutkin, Tangem's chief technology officer, explained that the "untrusted intermediary" concept means the technology does not rely on the trustworthiness of user devices like smartphones. The key is encrypted and transferred to another card, ensuring that no one in the middle can intercept it, regardless of the device's security status. Despite the potential benefits, the concept of private key backups has faced skepticism within the cryptocurrency community. In 2023, Ledger, a prominent hardware wallet provider, encountered backlash over its cloud-based private key recovery system. Similarly, Tangem faced criticism in late 2024 after a security vulnerability in its mobile app exposed certain users' private keys via emails. Tangem acknowledged the issue, attributing it to a bug in the app's log processing, which has since been resolved. Many Bitcoin enthusiasts adhere to the principle "Not your keys, not your coins," preferring to store seed phrases on physical backup solutions like fire-proof metal plates or using advanced methods such as Shamir Backup.