Secure, Seamless, and Safe: Tangem's Patent For Crypto Transfers-No Trust Required!

In a significant advancement for cryptocurrency security, Tangem has been granted a new patent titled “Systems and Methods for Transferring Secret Data via an Untrusted Intermediary Device” (U.S. Patent No. 12,212,665 B1). The patented technology introduces a method where a primary authentication device establishes a secure connection with a secondary authentication device through an untrusted intermediary. This setup ensures that secret information, such as cryptographic keys or transaction data, can be transmitted safely without compromising security.

Key Points of the Patent

Problem Addressed

Users of cryptographic key management devices (e.g., hardware wallets) may lose access to their assets if they lose their primary device (e.g., a smartcard).
Traditional methods like seed phrases (e.g., BIP39 mnemonic phrases) are insecure because they can be easily copied or stolen.
There is a need for a secure way to transfer secret data (e.g., private keys) from a primary device to a backup device without exposing the data to an untrusted intermediary.

Solution

The patent proposes a method where two trusted devices (e.g., a primary smartcard and a backup smartcard) authenticate each other and establish a secure communication channel via an untrusted intermediary device.
The secret data is encrypted using a unique transfer key derived from a shared secret, which is calculated using cryptographic protocols like Elliptic Curve Diffie-Hellman (ECDH) and key derivation functions (e.g., PBKDF2 or Argon2).
The intermediary device cannot decrypt the secret data because it does not have access to the private keys or the shared secret.

Key Steps in the Process

Authentication: The primary and secondary devices exchange public keys, attestation signatures, and certificates to verify each other's legitimacy.
Key Agreement: The devices use ECDH to agree on a shared secret, which is then used to derive a symmetric encryption key (transfer key) for encrypting the secret data.
Data Transfer: The encrypted secret data is transmitted via the untrusted intermediary device to the secondary device, which can decrypt it using the shared secret.

Security Features

The secret data is never exposed in plaintext during the transfer.
The intermediary device cannot access the secret data because it lacks the necessary private keys.
The process ensures that only legitimate devices can participate in the transfer, protecting against spoofing or tampering.

Applications

The method can be used to securely transfer private keys for cryptocurrency wallets, enabling users to create backup devices without risking exposure of their keys.
It can also be applied to other scenarios where sensitive data needs to be transferred securely between trusted devices via untrusted intermediaries.

Devices

The primary and secondary authentication devices can be smartcards, wearable devices, or other secure hardware devices with embedded microcontrollers and memory.
The intermediary device is typically a smartphone or similar device that facilitates the communication between the trusted devices.

Customers should care?

The patent directly enhances the security, convenience, and reliability of their crypto transactions.

With this technology, users no longer have to rely on the security of their phone or computer when approving transactions. The encryption process guarantees that only their Tangem card and an authenticated device can access the necessary information, preventing unauthorized access.
This advancement also makes crypto payments more seamless while maintaining a high level of security. Instead of adding complicated verification steps, the system encrypts data before transmission, reducing the risk of interception by hackers.
As the crypto landscape evolves, new threats emerge, making it essential for wallets to stay ahead of potential vulnerabilities. This patent future-proofs Tangem’s security, ensuring that users can continue to trust their hardware wallets for long-term asset protection.
With these improvements, Tangem customers gain greater confidence in managing their crypto, knowing their funds are secure without sacrificing ease of use.