Wyoming Passes Bill to Prevent Forced Disclosure of Private Crypto Keys
Legislators in Wyoming have passed a bill prohibiting state courts from forcing someone to disclose their private keys to their digital assets and cryptocurrency with one limited exception. The US state’s House of Representatives approved the laws, which will not apply in cases with no alternative ways of accessing the required information. This bill only requires Wyoming Governor Mark Gordon to sign for it to effect.
Thank you for reading this post, don't forget to subscribe!On February 15 2023, the bill was passed in the 67th general session by a vote of 41-13 in the Wyoming House of Representatives, a day after passing 31-0 in the Wyoming Senate. The bill will go into effect on July 1 2023, if the governor of Wyoming, Mark Gordon, signs it. The new bill WS 34-29-107 is titled “Production of private keys; prohibition,” the private keys legislation comes under Chapter 29 — Digital Assets, which is a subset of Title 34 — Property, Conveyances and Security Transactions.
The bill states, “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 another proceeding in this state that relates to a digital asset, digital identity or other interest or right to which the private key provides access unless a public key is unavailable or unable to disclose the requisite information concerning the digital asset, digital identity or other interest or right.” In the state of Wyoming, the incoming bill also states that the rules are not intended to disrupt “any lawful proceeding” that demands people to disclose the ownership or transfer of crypto.
However, the new law notes that it will not prevent anyone from being forced “to produce, sell, transfer, convey or disclose a digital asset, digital identity or other interest or right” to which a private key could provide access. A person can still be compelled to disclose information about the digital asset.
Cryptocurrency in Wyoming
Wyoming is one of the most crypto-friendly states in the United States. In February 2019, a bill to regulate and recognise cryptocurrencies as money was passed. During that same month, a bill defining specific open blockchain tokens as intangible personal property to establish a fintech regulatory sandbox was also passed. Two bills were passed that same month, establishing particular purpose depository institutions (SPDIs) blockchain banks. Wyoming became the first state in the United States to officially recognise a decentralised autonomous organisation (DAO) as a limited liability business (LLC) in July 2021.
In February 2022, Wyoming previously ideated issuing its state-owned stablecoin; however, the attempts have yet to develop into much since then. The latest move from Wyoming comes amid the cryptocurrency market making fresh gains. Bitcoin (BTC) made gains of up to 10.7% on the daily charts, which rejuvenated interest in the global cryptocurrency market. Moreover, the international cryptocurrency market cap increased by 8% in 24 hours, reaching $1.16 trillion. The ease of regulation fears most likely brings renewed interest in crypto.
The Founder and CEO of Custodia Bank, Caitlin Long, posted, “Big stuff today #Wyoming legislature passed a bill prohibiting compelled disclosure of private keys (w/ some exceptions), by a veto-proof majority! CONGRATS.”
Other states with similar crypto laws
Several states are enacting cryptocurrency-friendly regulations that permit the use of cryptocurrency across different business applications, with consumer access and interest being different across the country. For instance, cryptocurrency-related jobs are popping up in some states more than in others.
According to a 2022 study in July 2021, experts at Bitai method review mentioned that Nevada ranked as the best state for cryptocurrency enthusiasts. Local governments are prohibited from taxing blockchain technology, and electronic signatures on a blockchain are legal. This state is also known as cryptocurrency legislation friendly. Florida ranks third-best state regarding accessing cryptocurrency funds and the number of Bitcoin ATMs. This state legislation is friendly toward virtual currency, and its interest in cryptocurrency-related terms is high.
California is the golden state with the highest interest in cryptocurrency-related keywords across all 50 states. It ranked number 11 for the best cryptocurrency-related job posting. The regulatory stance in California on cryptocurrency is still being determined; however, the use of virtual currency was introduced to impose limitations, but competing legislation seeks to encourage its use.
According to a 2022 study, Kansas is ranked number ten as the best state for available cryptocurrency-friendly merchants. This state is considered friendly towards cryptocurrency as the state has defined virtual currency as not taxable and not subject to oversight. However, none of the states mentioned above has such a law as Wyoming that protects user’s private keys.
The new bill passed on February 14 2023, titled “Disclosure of Private Cryptographic Keys”, aims to advance lawful proceedings while protecting the investor’s privacy when possible. The bill awaits Wyoming Governor Mark Gordon’s signature to come into effect.
