Author: Peter Todd 2015-01-20 17:40:05
Published on: 2015-01-20T17:40:05+00:00
In a discussion between Peter Todd and a lawyer with a finance law background, they came to the conclusion that Bitcoin wallet software authors may have a custodial relationship with their users, especially if auto-update mechanisms are being used. This has potential legal implications as custodial relationships are highly regulated by financial laws in most jurisdictions. Custodial relationship is defined as having the ability, but not the right, to dispose of an asset. If one possesses the private keys for users’ bitcoins, they clearly have the ability to spend those bitcoins. However, Matt Whitlock argues that possessing a private key does not give you an automatic legal right to anything because a signed agreement with the user may take away any legal right that one had to their BTC, even though they may have the technical ability to spend them. The law has the notion of a custodial relationship for this reason. The logic one uses with tech may not be the same as the logic courts use.
Updated on: 2023-06-09T15:40:18.814470+00:00