BPI sounds alarm on ‘backdoor’ for hardware wallets in Kentucky crypto bill

Provisions in the state legislation violate the core ethos and value proposition of Bitcoin as an asset that can be held in self-custody, the trade group said.

Kentucky House Bill 380, a state-level crypto regulatory bill, includes provisions that would force crypto hardware wallet manufacturers to build a “backdoor” into devices, Bitcoin (BTC) advocacy organization Bitcoin Policy Institute (BPI) has warned. 

The provisions require crypto hardware wallet manufacturers to provide recovery options for users’ seed phrases, and were added to the bill in a “last-minute” floor amendment, BPI said. The amended Section 33 of the bill reads:

The sponsors of the legislation are state Representatives Aaron Thompson and Tom Smith.

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