{"id":21048,"date":"2023-02-19T23:11:16","date_gmt":"2023-02-20T07:11:16","guid":{"rendered":"https:\/\/coinnetworknews.com\/unworkable-bill-to-ban-blockchain-immutability-is-introduced-in-illinois\/"},"modified":"2023-02-19T23:11:16","modified_gmt":"2023-02-20T07:11:16","slug":"unworkable-bill-to-ban-blockchain-immutability-is-introduced-in-illinois","status":"publish","type":"post","link":"https:\/\/coinnetworknews.com\/unworkable-bill-to-ban-blockchain-immutability-is-introduced-in-illinois\/","title":{"rendered":"‘Unworkable’ bill to ban blockchain immutability is introduced in Illinois"},"content":{"rendered":"
\n

A recently introduced Illinois Senate Bill has been ridiculed by the crypto community over its “unworkable” plans to force blockchain miners and validators to do “impossible things” \u2014 such as reversing transactions if ordered to do so by a state court.<\/p>\n

The Senate Bill was quietly introduced<\/a> into the Illinois legislature on Feb. 9 by Illinois Senator Robert Peters but appears to have been only recently noticed<\/a> by Florida-based lawyer Drew Hinkes who discussed the bill in a Twitter post on Feb. 19.<\/p>\n

The bill titled the \u201cDigital Property Protection and Law Enforcement Act,\u201d would authorize the courts \u2014 upon a valid request from the Attorney General or a State’s Attorney that is made pursuant to the laws of Illinois<\/a> \u2014 to order a blockchain transaction that is executed via a smart contract to be altered or rescinded.<\/p>\n

The act would apply to any “blockchain network that processes a blockchain transaction originating in the State.”<\/p>\n

Senator Robert Peter\u2019s bill to ban immutability on blockchains. Source: <\/em>Illinois General Assembly.<\/em><\/a><\/figcaption><\/figure>\n

Hinkes described the bill as \u201cthe most unworkable state law\u201d related to blockchain and cryptocurrency that he has ever seen. <\/p>\n

“This is a stunning reverse course for a state that was previously pro -innovation. Instead we now get possibly the most unworkable state law related to #crypto and #blockchain I\u2019ve ever seen,” he said.<\/p>\n

The bill states that any blockchain miners and validators may be fined between $5,000-10,000 for each day that they fail to comply with court orders.<\/p>\n

While acknowledging the need to implement bills that strengthen consumer protection, Hinkes said it would be \u201cimpossible\u201d for miners and validators to comply with the bill proposed by Senator Peters.<\/p>\n

\n

SB1887 focuses on consumer protection (this is GOOD). But, the manner in which it seeks to protect consumers is to require #node<\/a> operators ##miners<\/a> & #validators<\/a> to do impossible things, or things that create for themselves new criminal & civil liability at pain of fines\/ fees \/3<\/p>\n

\u2014 Drew Hinkes (@propelforward) February 19, 2023<\/a><\/p><\/blockquote>\n

Hinkes was also shocked to see that \u201cno defense\u201d would be available to miners or validators that operated on a blockchain network that \u201chas not adopted reasonable available procedures\u201d to comply with the court orders. <\/p>\n

The bill also appears to mandate “any person using a smart contract to deliver goods and services” to include code in the smart contract which can be used to comply with court orders.<\/p>\n

\u201cAny person using a smart contract to deliver goods or services in this State shall include smart contract code capable of enforcing court orders regarding the smart contract.\u201d<\/p><\/blockquote>\n

\n

If you thought that was bad. Get ready to #Illinoize<\/a> your blockchain! Yes, #Illinois<\/a> is going to force you to re-write your blockchain- specifically by including smart contract code capable of responding to court orders. And if you don\u2019t, you can be sued \/10<\/p>\n

\u2014 Drew Hinkes (@propelforward) February 19, 2023<\/a><\/p><\/blockquote>\n

Other members of the cryptocurrency community have responded with similar ridicule of the bill proposed by Peters.<\/p>\n

Crypto analyst \u201cfoobar\u201d noted to his 120,800 Twitter followers on Feb. 19 that court ordered transactions would need to \u2014 somehow \u2014 be amended \u201cwithout needing the private key\u201d of the participants, which he considered to be \u201chilarious.\u201d<\/p>\n

\n

this is hilarious, Illinois is proposing a bill that would make miners & validators \u201crespond to a court order by including transactions on the blockchain without needing the private key\u201d<\/p>\n

why are you refusing to comply, transfer satoshi\u2019s bitcoin to governor pritzker! off to jail https:\/\/t.co\/7JcpktWMgH<\/a> pic.twitter.com\/FPKLsFNE3e<\/a><\/p>\n

\u2014 foobar (@0xfoobar) February 19, 2023<\/a><\/p><\/blockquote>\n

Gabriel Shapiro, lawyer and general counsel at investment firm Delphi Labs explained very briefly to his 34,100 Twitter followers on Feb. 19 that the bill would essentially try to ban immutability on blockchains:<\/a><\/p>\n

\n

TLDR–they are trying to ban immutability https:\/\/t.co\/HSg00pcFHx<\/a><\/p>\n

\u2014 _gabrielShapir0 (@lex_node) February 19, 2023<\/a><\/p><\/blockquote>\n

Meanwhile, Carla Reyes, assistant professor at Southern Methodist University School of Law in a Feb. 19 tweet, stated<\/a>\u00a0that lawmakers should only introduce bills if they understand how the technology works.<\/p>\n

While immutability is a common property in blockchains and distributed ledgers, the Peters-sponsored bill explained that such networks lack an enforcement mechanism that can be tapped into by the courts:<\/p>\n

\u201cAs a result, the cost to enforce legal rights in digital property is often prohibitive such that the property rights cannot be vindicated and the vast majority of blockchain crimes go unpunished.\u201d<\/p><\/blockquote>\n

Fraud and mistake would be two of the most commonly used cases where Illinois courts may order for a blockchain transaction to the victim or original sender, the bill noted. <\/p>\n

The bill also wants to help users recover their assets if they lose their private keys.<\/p>\n

Related: <\/em><\/strong>What is blockchain technology? How does it work?<\/em><\/strong><\/a> <\/em><\/strong><\/p>\n

While the bill was only introduced on Feb. 9, it will need to be “read” and voted in by three separate committee hearings before being passed on to Illinois Governor Jay Pritzker to officially sign the bill into law.<\/p>\n

The first reading took place on the same day it was introduced into the Illinois General Assembly by Peters.<\/p>\n

If it is ever passed, the contents of the bill would take effect 30 days after becoming law.<\/p>\n