New law in U. S. on Digital Property Protection and Law Enforcement Act
2023.02.20 02:50
New law in U. S. on Digital Property Protection and Law Enforcement Act
By Tiffany Smith
Budrigannews.com – The cryptocurrency community has mocked a recently introduced Illinois Senate Bill for its “unworkable” plans to require blockchain miners and validators to perform “impossible things,” such as reverse transactions when ordered to do so by a state court.
On February 9, Illinois Senator Robert Peters quietly introduced the Senate Bill into the Illinois legislature. Florida-based attorney Drew Hinkes, who wrote about the bill on Twitter on February 19, appears to have only recently noticed it.
The “Digital Property Protection and Law Enforcement Act” would give the courts the authority to change or cancel a blockchain transaction that is carried out through a smart contract upon a legitimate request from the Attorney General or a State’s Attorney made in accordance with Illinois law.
Any “blockchain network that processes a blockchain transaction originating in the State” would be subject to the act.
The bill, according to Hinkes, is “the most unworkable state law” regarding cryptocurrencies and blockchain technology that he has ever seen.
“For a state that was once pro-innovation, this is a stunning turn around. He stated, “Instead, we now get possibly the most unworkable state law I’ve ever seen related to crypto and blockchain.”
For each day that they fail to comply with court orders, blockchain miners and validators face a fine of $5,000 to $10,000, according to the bill.
Hinkes stated that miners and validators would be unable to comply with the bill proposed by Senator Peters, despite the fact that he acknowledged the need to implement bills that enhance consumer protection.
The focus of SB1887 on consumer protection is positive. However, in order to safeguard consumers, it requires node operators, miners, and validators to perform impossible tasks or to accept new criminal and civil liability in the form of fines and fees.
Hinkes was also shocked to learn that miners and validators on a blockchain network that “has not adopted reasonable available procedures” to comply with the court orders would have “no defense.”
Additionally, it appears that “any person using a smart contract to deliver goods and services” must include code that can be used to comply with court orders in the smart contract.
“Any person using a smart contract to deliver goods or services in this State must include smart contract code that can enforce smart contract court orders.”
If you considered that to be bad. Prepare to have your blockchain #Illinoized! Yes, Illinois will require you to rewrite your blockchain, specifically by including code for smart contracts that can comply with court orders. Additionally, you may be sued if you do not.
The bill that Peters proposed has been ridiculed in a manner similar to this by other cryptocurrency community members.
On February 19, crypto analyst “foobar” informed his 120,800 Twitter followers that court-ordered transactions would need to be altered “without needing the private key” of participants, which he deemed “hilarious.”
This is hilarious: Illinois is putting forth a bill that would require miners and validators to “respond to a court order by including transactions on the blockchain without needing the private key.”
Why are you refusing to comply? Instead, transfer Satoshi’s bitcoin to Governor Pritzker! off to prison: http://twitter.com/FPKLsFNE3e
On Feb. 19, investment firm Delphi Labs lawyer and general counsel Gabriel Shapiro briefed his 34,100 Twitter followers about the bill’s attempt to prohibit immutability on blockchains:
TLDR–they are trying to ban immutability https://t.co/HSg00pcFHx
In the meantime, Southern Methodist University School of Law assistant professor Carla Reyes stated in a tweet on February 19 that lawmakers should only introduce bills if they comprehend how technology works.
Despite the fact that distributed ledgers and blockchains all share immutability, the bill sponsored by Peters explained that these networks lack an enforcement mechanism that the courts could use:
Because of this, “as a result, the cost of enforcing legal rights in digital property is frequently prohibitive,” “the property rights cannot be vindicated, and the vast majority of blockchain crimes remain unpunished.”
According to the bill, two of the most common scenarios in which Illinois courts may order a blockchain transaction to the victim or original sender are fraud and error.
Additionally, the goal of the bill is to assist users in locating their assets after losing their private keys.
Even though the bill was only introduced on February 9, it will still need to be “read” and approved by three different committee hearings before Illinois Governor Jay Pritzker can officially sign it into law.
On the same day that Peters presented it to the Illinois General Assembly, the first reading took place.
The provisions of the bill would take effect 30 days after becoming law if it were ever approved.
