Miller

🚨BPI has just learned of an amendment buried in Kentucky HB 380 that would require hardware wallet providers to reset users' seed phrases on request. This would effectively outlaw self-custody in Kentucky. BPI is sending a letter to the Kentucky Senate informing them of the harmfulness of this language. Section 33 was added as a last-minute floor amendment to a 77-page virtual currency kiosk regulation bill. The underlying bill has political support and is expected to move through the Senate for final passage, possibly within the next week. The mandate is technologically impossible for non-custodial wallets. Hardware wallets are specifically designed so that no one — including the manufacturer — can access or recover a user's seed phrase. Requiring a backdoor for seed phrase recovery breaks Bitcoin's fundamental security guarantees and pushes users toward centralized custodians that are vulnerable to hacks and failures. Kentucky legislators should be protecting their constituents' right to secure their own property. We urge the Senate to strip this provision before the bill reaches a vote. Relevant text below

After more than a decade of uncertainty, this interpretation will provide market participants with a clear understanding of how the SEC treats crypto assets under federal securities laws. This is what regulatory agencies are supposed to do: draw clear lines in clear terms.

My sources on this matter have also told me that one of the items in CLARITY that may be on the chopping block in exchange for Coinbase/the crypto industry getting interest on stablecoins are the BRCA protections for developers. Deeply disturbing.

The U.S. Federal Reserve has published guidance that: 1. Tokenized equities share the same capital treatment as equities. Same capital rules, same risk framework. 2. The technology used to issue or transfer them doesn't change the treatment. 3. Permissioned or permissionless chain makes no difference. Banks evaluating a chain for tokenized securities no longer face a regulatory penalty for choosing a permissionless chain over a private one.