said<\/a>.<\/p>\nThe bill was introduced by state Representatives Aaron Thompson and Tom Smith.<\/p>\n
According to the bill\u2019s official language, providers \u201cshall provide a mechanism for and assist any person who owns a hardware wallet\u201d in resetting any \u201cpassword, PIN, seed phrase, or other similar information that is necessary to access the contents of the hardware wallet.\u201d<\/p>\n
<\/p>\n
There are also identity verification requirements for users requesting password, seed phrase, or PIN resets from manufacturers.<\/p>\n
The BPI says this is \u201ctechnologically impossible for non custodial wallets\u201d and adds that no one \u201ccan access or recover a user\u2019s seed phrase.\u201d<\/p>\n
It is a threat to self-custody, which the group warns could push users toward centralized custody options that do not offer the same level of control.<\/p>\n
\u201cKentucky legislators should be protecting their constituents\u2019 right to secure their own property. We urge the Senate to strip this provision before the bill reaches a vote,\u201d the BPI added.<\/p>\n
Concerns around self-custody<\/h1>\n
Self-custody remains a debated topic. Crypto proponents argue that it is a fundamental right.<\/p>\n
Some regulators agree. For instance, U.S. SEC Chair Paul Atkins said he is \u201cin favor\u201d of self-custody options in cases where intermediaries impose a financial or operational burden on the user.<\/p>\n
Meanwhile, California\u2019s Banking and Finance Committee chair Avelino Valencia amended a bill and added provisions that protect a user\u2019s self-custody rights.<\/p>\n
However, last year, the SEC issued a warning to retail investors about crypto custody risks and urged users to carefully weigh the trade-offs between managing their own wallets and relying on third-party custodians.<\/p>\n
The agency noted that losing a private key would result in permanent loss of access to crypto assets, while also cautioning that custodial services carry their own risks, including hacks, misuse, or insolvency that could leave users unable to access their funds.<\/p>\n
<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"
A state-level crypto regulatory bill introduced in Kentucky includes provisions that would force hardware wallet manufacturers to build a \u201cbackdoor\u201d into devices, according to the Bitcoin Policy Institute. Summary Kentucky…<\/p>\n","protected":false},"author":1,"featured_media":23937,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-24111","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency"],"_links":{"self":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/24111","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/comments?post=24111"}],"version-history":[{"count":1,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/24111\/revisions"}],"predecessor-version":[{"id":24112,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/24111\/revisions\/24112"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/media\/23937"}],"wp:attachment":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/media?parent=24111"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/categories?post=24111"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/tags?post=24111"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}