Security

Kentucky crypto ATM bill raises concerns over wallet security

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March 20, 2026

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Kentucky House Bill 380 has raised concerns among bitcoin industry experts due to a provision for crypto hardware wallets. The bill aims to regulate and license crypto ATMs, but includes a line related to resetting a password for a hardware wallet, according to a report by The Block.

Section 33 of the proposed bill states that a hardware provider must "provide a mechanism for, and assist any person who owns a hardware wallet that was provided by the provider with, resetting any password, pin, seed phrase or other similar information that is necessary to access the contents of the hardware wallet."

Experts point out this would be impossible for self-owned wallets, where only the user controls the keys or seed phrase, rather than the manufacturer. The Bitcoin Policy institute argued on X that "requiring a backdoor breaks bitcoin's core security guarantees."

HB 380 passed through the Kentucky House and is now being considered in the Senate. Recently, Indiana became the first state to ban crypto ATMs entirely.