Unless they store that too, but since you can use as many different passwords as you want, that must have a limitation.
Ledger is stupid enough and they are storing passphrase on their device combining it with PIN code, but Trezor is not storing passphrase anywhere and you can verify that because they are fully open source.
Lesson of the day: when you give up your freedom for safety, you lose both
They first take away all your freedom and lock you, than they offer you solution to make you free in future if you accept some new restrictions... sounds familiar?
Good thing is there are more and more people who are waking up and working for freedom and not against it.
It is sad to read this but they will make it happen and indeed a backdoor in hardware wallets being developed b the IRS themselves is a true threat. If you work at the IRS and you know how to get access to a specific type of wallet, what will keep you from abusing that knowledge when the opportunity coms up? That's a real issue
They don't even need to have access to hardware wallet factory and workers, and all they need is backdoor in closed source
secure element chips like they are doing with smartphones and NDA would protect everyone.
That is why we need to have open source hardware wallets with open source secure elements to reduce risk as much as possible.
