Wyoming passes bill prohibing Bitcoin private keys from Courts

NotATether

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Quote from: buwaytress on February 17, 2023, 08:50:03 AM

What happens when people are legally owed money by claimants and then this prevents claims?

e.g. What if Mt Gox v2 happens and some random CEO decides f it, I'm keeping my private keys. Not their keys not their coins.

1. This will only apply if the exchange is registered in Wyoming.
2. If it's a public company it will have to reimburse all investors in court.
3. Even if it's a private company, you can't just keep the private keys to yourself like that because you have to pay all the secured creditors in the event of a bankruptcy.

odolvlobo

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Quote from: Saint-loup on February 17, 2023, 08:41:11 AM

But I wonder what will happen now if Wyoming citizens use Bitcoin private keys as passwords for encrypting unlawful/criminal contents and communications?

In the U.S., I believe that a person cannot be compelled to disclose a password because doing so may be self-incrimination.

Quote from: buwaytress on February 17, 2023, 08:50:03 AM

What happens when people are legally owed money by claimants and then this prevents claims?

They can be compelled to turn over the money without having to reveal the private keys.

NeuroticFish

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Quote from: DaveF on February 17, 2023, 07:40:53 AM

It's all political showmanship.

Political showmanship is usually meant to attract businesses and individuals (preferably wealthy ones) into the empty or poor countries, or states, or regions.
Actually doesn't even have to be poor or empty... one example I see is Lugano (in Switzerland) making bitcoin some sort of legal tender.

buwaytress

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Quote from: Artemis3 on February 17, 2023, 09:17:42 AM

Quote from: buwaytress on February 17, 2023, 08:50:03 AM

e.g. What if Mt Gox v2 happens and some random CEO decides f it, I'm keeping my private keys. Not their keys not their coins.

And i can see a point of that "CEO" from doing it (Why did you trust them?). In any case, he should just transfer the funds, not reveal keys. But in a well made exit scam they would have moved slowly those funds elsewhere by the time "oops, we ran out of money, our business model failed"...

People should just be educated about the true dangers of "custodial"...

Won't stop people from choosing what's easy for them. Or what fits their greed (think most people go on exchanges these days for their interest bearing stuff from "saving/staking".

I would actually say if you run a business and also requires being regulated, then the private keys must at least be retrievable by the same regulating authorities. Personal privacy shouldn't apply here to CEOs of regulated businesses that act as custodians for customer money. The law should be able to seize funds of rogue CEOs -- doesn't matter bank, company, or exchange.

Quote from: Saint-loup on February 17, 2023, 09:27:51 AM

The court will still see how much funds he holds through his adresses and public keys, and if he doesn't want to give on his own the amount of money ruled by the court they could seize all his other assets and put him in jail until he agrees to give the rest.

That's probably what they already do, but it doesn't solve the problem for the claimants...

Knowing how cray people get in that position, he might just try to blackmail instead and say he's willing to go to jail for a lifetime and take his keys to his grave. Can't imagine what people would do to him if he's out to force the keys out of him heh.

Saint-loup

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Quote from: buwaytress on February 17, 2023, 08:50:03 AM

On the surface, I do like that you can't be forced to hand over your private information... but I should think standing legal obligations should also be upheld (like if a person divorces and legally must hand over the divorced spouse's share of property... or tax obligations. I disagree with a lot of things but still believe in obeying the law of the country I live in. You know, "your house, your rules".

What happens when people are legally owed money by claimants and then this prevents claims?

e.g. What if Mt Gox v2 happens and some random CEO decides f it, I'm keeping my private keys. Not their keys not their coins.

The court will still see how much funds he holds through his adresses and public keys, and if he doesn't want to give on his own the amount of money ruled by the court they could seize all his other assets and put him in jail until he agrees to give the rest.

Artemis3

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Quote from: buwaytress on February 17, 2023, 08:50:03 AM

e.g. What if Mt Gox v2 happens and some random CEO decides f it, I'm keeping my private keys. Not their keys not their coins.

Wasn't that FTX? or Cryptsy or...

Never trust exchanges, or "custodial" wallets.

Not Your Keys, not Your Coins.

When you deposit money into a bank, you are lending it to that institution, hoping they pay it back whenever you need it. Exchanges are like this, but with more relaxed regulations. Both are really bad IMO.

I agree with protecting the privacy of private keys.

And i can see a point of that "CEO" from doing it (Why did you trust them?). In any case, he should just transfer the funds, not reveal keys. But in a well made exit scam they would have moved slowly those funds elsewhere by the time "oops, we ran out of money, our business model failed"...

People should just be educated about the true dangers of "custodial"...

buwaytress

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On the surface, I do like that you can't be forced to hand over your private information... but I should think standing legal obligations should also be upheld (like if a person divorces and legally must hand over the divorced spouse's share of property... or tax obligations. I disagree with a lot of things but still believe in obeying the law of the country I live in. You know, "your house, your rules".

What happens when people are legally owed money by claimants and then this prevents claims?

e.g. What if Mt Gox v2 happens and some random CEO decides f it, I'm keeping my private keys. Not their keys not their coins.

Saint-loup

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I hope it will be used as a framework for other states and countries around the world, because it should be a right for any citizen, written in laws of any country. Unlike any other goods, disclosing a private key leads to surrender its property because it irreversibly remove all protection against unauthorized transactions from anyone seeing this key without leaving any trace.
But I wonder what will happen now if Wyoming citizens use Bitcoin private keys as passwords for encrypting unlawful/criminal contents and communications?

DaveF

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A bit of snark here but...

Wyoming has about 600,000 people living in about 98000 square miles with a GDP of $37 billion.
Nassau County NY has about 1.4 million people living in 455 square miles with a GDP of $85 billion.

These mostly empty STATES can pass laws like this since it looks good on the books (although as written does very little) because the odds of it mattering one way or another are fairly small.

Having it places with a lot of people and a lot of money would matter since the issue might actually come up. Or, to put it another way. It's all political showmanship.
Something like this would probably never pass in a location with a lot of people and money moving since there could be real consequences to it.

There was a town around here that passed a law about no buildings higher then 25 stories. Which was kind of funny since due to the softness of the ground and a few other things any large buildings like that would have slid into the Long Island Sound. But it showed that the town was protecting the 'tranquility' of the area.

-Dave

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Quote from: DaveF on February 16, 2023, 09:11:11 PM

I am really just reading it as:
Paragraph 1 = You cannot be forced to hand over your private keys.
Paragraph 2 = unless we say so.

It's good in theory, but I can see it being challenged as soon as someone tries to hide some funds and all of a sudden you are forced to produce private keys just to prove they are not related to some address.

-Dave

Excellent summary! That's exactly what it is!

Why a government would be so concerned about the privacy of its citizens? These kinds of laws are just eyewash, not to be believed or to be taken seriously!

Usually, a person will be forced to declare his/her private key only if they are being prosecuted by any government department, especially IRS. So they can't be protected under this bill. So it doesn't really make sense!

NeuroticFish

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Quote from: DaveF on February 16, 2023, 09:11:11 PM

I am really just reading it as:
Paragraph 1 = You cannot be forced to hand over your private keys.
Paragraph 2 = unless we say so.

Thanks for "translating" this Cheesy

I've read the news yesterday and I was surprised, because at first it sounded too good to be true (hence some alarms got triggered). Now I know why.

Flexystar

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Thoughts? Mate this is more than good because we usually never see such news on the market. All the time we can hear, abc session happens and court concluded ban on this crypto stuff, ban on that person using crypto, FED ceasing the assets and what not?

Having this bill does nothing except avoiding exploitation of our privacy publicly which used to be done all the time. Once your keys are gone it follows catastrophic leaks of your coin as well.

So definitely this is just what we had blessed from Mr Satoshi in the first place only the difference is we have protection from the justice system as well.

Kakmakr

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It is simple...

The court does not have to tell you to divulge your Private keys, they can simply order you to sell your coins and then divide the income from those coins, with your partner as per marital contract with that spouse.

If the court can tell you to sell your house and give 50% of the proceeds to your spouse, why should they not be able to order you to sell your coins?

odolvlobo

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It appears to me that it is saying that you cannot be compelled to disclose the value of a private key, but you can be compelled to use it.

So, for example, it prevents a court from ordering you to turn over the private key in order to confiscate your bitcoins, but it does not prevent a court from ordering you to transfer bitcoins.

DaveF

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I am really just reading it as:
Paragraph 1 = You cannot be forced to hand over your private keys.
Paragraph 2 = unless we say so.

It's good in theory, but I can see it being challenged as soon as someone tries to hide some funds and all of a sudden you are forced to produce private keys just to prove they are not related to some address.

-Dave

stompix

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Quote from: Dave1 on February 16, 2023, 08:36:19 PM

Which case will this be applicable? We have heard cases like husband and wife having a bitter divorce and wife tells court that his husband has bitcoin stash somewhere. But this law will protect the husband from divulging his private keys to the court.

Unless he is required to do so in which the restriction is no longer applied.

If you try to hide your coins away and your wife has proof that you had access to an address that at the moment of the divorce holds any amount and you refuse to share than the court can ask you to provide the lawyers with access to those assets, refusing to obey this is usually followed by having you held in contempt of court and a fine, in extreme situations jail time.
What this paragraph grants you is the fact that you're no longer forced to provide the key if there are other methods of determining, in the case you mentioned the said value of those assets with a public key.

hd49728

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Not your keys, not your coins!

I think the bill is good.

Whatever legislation is, it's your key and it's your bitcoin.

With private key, you can sweep it to another wallet, move your coins to another wallet with a new private key. It's your responsibility to keep your private key safely and privately (secretly).

If you don't want to lose it to courts, your family members, keep it privately (secretly). If you want more, use a multi-signature wallet like 2/3 cosigners. If one private key is lost to court, family members, with 2 other co-signers, you still own your coins.

Dave1

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https://wyoleg.gov/Legislation/2023/HB0086

What are your thoughts on this?

Will this set a precedence for all other States to follow?

Which case will this be applicable? We have heard cases like husband and wife having a bitter divorce and wife tells court that his husband has bitcoin stash somewhere. But this law will protect the husband from divulging his private keys to the court.

Topic: Wyoming passes bill prohibing Bitcoin private keys from Courts (Read 193 times)