Kentucky's new cryptocurrency ATM bill includes a provision for hardware wallets, which has been criticized as a "de facto ban on self-custody."

PANews reported on March 20th that, according to The Block, a Kentucky bill, HB380, aimed at regulating cryptocurrency ATMs, has sparked controversy due to a new provision. This provision requires hardware wallet providers to offer mechanisms to assist users in resetting access credentials such as passwords, PINs, or mnemonic phrases. Critics point out that this requirement fundamentally conflicts with the design of self-custodial wallets—private keys and mnemonic phrases are solely controlled by the user, and the provider cannot access or recover them. This is technically difficult to implement and essentially requires a "backdoor," weakening Bitcoin's core security guarantees and potentially "effectively banning self-custodial services." The bill has already passed the House of Representatives and is currently under consideration in the Senate; the relevant provisions may still be amended or removed.