From mboxrd@z Thu Jan 1 00:00:00 1970 Received: from sog-mx-1.v43.ch3.sourceforge.com ([172.29.43.191] helo=mx.sourceforge.net) by sfs-ml-1.v29.ch3.sourceforge.com with esmtp (Exim 4.76) (envelope-from ) id 1YDcjU-00018n-VB for bitcoin-development@lists.sourceforge.net; Tue, 20 Jan 2015 17:36:53 +0000 X-ACL-Warn: Received: from resqmta-po-03v.sys.comcast.net ([96.114.154.162]) by sog-mx-1.v43.ch3.sourceforge.com with esmtps (TLSv1:AES128-SHA:128) (Exim 4.76) id 1YDcjT-0003EM-Ej for bitcoin-development@lists.sourceforge.net; Tue, 20 Jan 2015 17:36:52 +0000 Received: from resomta-po-18v.sys.comcast.net ([96.114.154.242]) by resqmta-po-03v.sys.comcast.net with comcast id iHNn1p0015E3ZMc01HPFbd; Tue, 20 Jan 2015 17:23:15 +0000 Received: from crushinator.localnet ([IPv6:2601:6:4800:47f:1e4e:1f4d:332c:3bf6]) by resomta-po-18v.sys.comcast.net with comcast id iHPE1p00B2JF60R01HPE8G; Tue, 20 Jan 2015 17:23:15 +0000 From: Matt Whitlock To: bitcoin-development@lists.sourceforge.net Date: Tue, 20 Jan 2015 12:23:14 -0500 Message-ID: <2236907.ZtrNgikFVR@crushinator> User-Agent: KMail/4.14.3 (Linux/3.16.5-gentoo; KDE/4.14.3; x86_64; ; ) In-Reply-To: <20150120154641.GA32556@muck> References: <20150120154641.GA32556@muck> MIME-Version: 1.0 Content-Transfer-Encoding: 7Bit Content-Type: text/plain; charset="us-ascii" X-Spam-Score: 0.0 (/) X-Spam-Report: Spam Filtering performed by mx.sourceforge.net. See http://spamassassin.org/tag/ for more details. -0.0 RCVD_IN_DNSWL_NONE RBL: Sender listed at http://www.dnswl.org/, no trust [96.114.154.162 listed in list.dnswl.org] 0.1 DKIM_SIGNED Message has a DKIM or DK signature, not necessarily valid -0.1 DKIM_VALID Message has at least one valid DKIM or DK signature X-Headers-End: 1YDcjT-0003EM-Ej Subject: Re: [Bitcoin-development] The legal risks of auto-updating wallet software; custodial relationships X-BeenThere: bitcoin-development@lists.sourceforge.net X-Mailman-Version: 2.1.9 Precedence: list List-Id: List-Unsubscribe: , List-Archive: List-Post: List-Help: List-Subscribe: , X-List-Received-Date: Tue, 20 Jan 2015 17:36:53 -0000 On Tuesday, 20 January 2015, at 10:46 am, Peter Todd wrote: > I was talking to a lawyer with a background in finance law the other day > and we came to a somewhat worrying conclusion: authors of Bitcoin wallet > software probably have a custodial relationship with their users, > especially if they use auto-update mechanisms. Unfortunately this has > potential legal implications as custodial relationships tend to be > pretty highly regulated. > > Why is this? Well, in most jurisdictions financial laws a custodial > relationship is defined as having the ability, but not the right, to > dispose of an asset. If you have the private keys for your users' > bitcoins - e.g. an exchange or "online" wallet - you clearly have the > ability to spend those bitcoins, thus you have a custodial relationship. If you have the private keys for your users' bitcoins, then you are every bit as much the owner of those bitcoins as your users are. There is no custodial relationship, as you have both the ability and the right to spend those bitcoins. Possession of a private key is equivalent to ownership of the bitcoins controlled by that private key.