Wyoming Passes Bill That Bans Forced Disclosure Of Private Keys

February 16, 2023 4:06 pm Comments

When it comes to digital assets, protecting the private keys of a wallet is essential to maintaining privacy and retaining control over the assets.

The state of Wyoming just passed a new bill that will further protect this by banning courts the ability to force users to disclose their private keys.

This is a step in the right direction and ensures that crypto can continue to do what it was designed for which is to maintain the user’s financial anonymity.

With that being said, there is a caveat to the rule which is that the bill will only be effective if the public key is unable to provide information about the digital asset.

So far, Wyoming seems to be the only state that has passed such a bill and it will be important for many other states to follow the same steps in order to protect digital asset owners around the country.

Watcher.guru reports:

“No person shall be compelled to produce a private key or make a private key known to any other person in any civil, criminal, administrative, legislative or other proceeding[s]”

The bill was passed on Feb. 15th in the 67th general session of the Wyoming House of Representatives. The law will go into effect on Jul. 1st if the governor of Wyoming, Mark Gordon, approves it.

The legislation also notes that it will not prevent someone from being forced “to produce, sell, transfer, convey, or disclose a digital asset (such as cryptocurrency), digital identity, or other interest or right.”

A person can still be forced to disclose information about the digital asset.

Not every state has created a crypto friendly regulatory environment like Wyoming.

Within the United States, there are only a few states that are considered good choices for the industry which includes places like Arizona where there was an attempt to make Bitcoin legal tender.

This is also not the first time that Wyoming has been involved in digital asset related bills as the state was also the first to pass a bill that allowed decentralized autonomous organizations to be registered as LLCs.

The recent move to protect user’s private keys will be essential as there is now a industry wide shift for investors to protect their assets using private wallets.

This comes during the bear market that has lasted since last year which has caused many third-party exchanges to go bankrupt and result in users losing their assets.

The regulation to protect digital asset rights must be there in order for the industry to continue to grow and reach its full potential.

BitcoinMagazine reports:

It does not specify that it would be only for Bitcoin keys, so it would also apply the same to private keys utilized as decentralized identities, or any other use cases. Wyoming has been the center of attention in regards to Bitcoin adoption in the U.S. for some time, partially because of Senator Cynthia Lummis’ ardent support of Bitcoin and push for regulation within the country.

Christopher Allen, internet cryptography pioneer and executive director of Blockchain Commons who previously wrote for Bitcoin Magazine in regards to the importance of protecting private key sovereignty, described why Wyoming has been a groundbreaking state for this type of legislature.

“[Wyoming] has a long tradition of ‘good fences make for good neighbors’… and as a small state it has a true ‘citizen’ legislature.… they resonate well with the concept of “Self-Sovereignty” in bitcoin and digital identity,” Allen told Bitcoin Magazine.

If approved by the governor, the bill would take effect on July 1, 2023.

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