Kentucky Senate Urged to Strip Hardware Wallet Provision From Crypto Bill
A recent amendment to Kentucky’s HB 380 would require hardware wallet providers to offer a way for users to reset passwords, PINs, or seed phrases—a provision widely criticized by crypto experts as reflecting a lack of understanding of self-custody. Hardware wallets are designed so only the user can access or recover private keys, with no central authority able to reset credentials. Critics argue this requirement is technologically impossible for non-custodial wallets, would undermine the core security model of Bitcoin, and could force providers to either fundamentally redesign products or exit the Kentucky market, limiting consumer choice and privacy. Alternative risk-mitigation strategies, such as social recovery or multi-signature wallets, could manage user error without centralizing control. The amendment was attached at the last minute to a broader, industry-supported bill regulating crypto ATMs. This proposal comes amid increasing scrutiny of the crypto ATM sector in the U.S., with similar regulatory actions in other states. Opponents urge education and direct policy engagement to address misconceptions and highlight the dangers such measures pose to user security and autonomy.
