Update: Official Ledger response to this issue.

The new Windows 10 May 2019 update adds new security features that break certain browser (Chrome, Brave and Edge) based dapps for Ledger Nano S (and Nano X). This is the latest “big” update that is part of Microsoft’s plan to add additional functionality and security to Windows 10. Currently the update has already been scheduled for public release, although it is not mandatory. A new pop-up will display when connecting to the hardware wallet labeled “Windows Security“.

New Windows Security Prompt to interact with Ledger Nano S

This prompt is not present in previous versions of Windows 10 and is a new feature that is meant to prove hardware security. Unfortunately some websites like MyEtherWallet, MyCrypto and IDEX will have certain delay issues when unlocking the wallet.

Unlock Device error: UNKNOWN_ERROR (0x6804)

Fixing Ledger Nano issues on Windows 10 1903 Update:

To fix comparability issues between Ledger Nano (S or X) and Windows 10, try the following:

Install Latest Ledger Live

Update to the Latest Ledger Nano Firmware

Do not click or interact with the pop-window.

This is not an issue with hardware wallet itself but rather an interaction issue with various websites. These websites need to be updated to reflect changes with hardware security in Windows 10. As of now, there are no known methods to disable new security features in Windows 10. Please refer to the official response from Ledger on this compatibility issue.

Ledger Live is Unaffected

Ledger Live App’s operation is not affected by the new security changes. Currently asset management and Leger Manager operations are fully functional as of this update. It seems that the new security changes only affect the web based applications.