The Satoshi Action Fund is at the forefront of a movement to secure state-level protections for Bitcoin self-custody, drawing inspiration from the cannabis industry’s successful navigation of federal regulations. The goal of this initiative is to establish “safe haven” states for Bitcoin users, providing legal assurances for holding and utilizing the digital asset.
Dennis Porter, CEO and co-founder of the Satoshi Action Fund, emphasizes the importance of state laws in the absence of federal regulations. He argues that if federal law contradicts state law, the federal government cannot require state or local law enforcement to assist in enforcement. Drawing parallels to the cannabis industry, Porter highlights how states passing laws to protect cannabis use and possession have allowed the industry to thrive despite federal prohibition.
The Satoshi Action Fund is taking a proactive approach by preempting potential federal action through the establishment of state laws safeguarding Bitcoin rights. Porter stresses the importance of avoiding the decades-long setbacks experienced by the cannabis industry by acting swiftly at the state level.
Porter’s strategy is rooted in historical precedent, citing movements such as women’s suffrage, civil rights, and same-sex marriage, which gained momentum at the state level before leading to federal legislation. He believes that a flurry of state-level activity can prompt the federal government to pass similar legislation in response.
However, some legal experts caution about the limitations of state laws in the face of federal authority. Attorney Joe Carlasare points out that federal law typically supersedes state law and can preempt state legislation. Despite this, Carlasare believes that the federal government cannot lawfully ban the self-custody of Bitcoin.
In response to Porter’s assertions, Carlasare challenges the effectiveness of state laws in influencing federal decisions. He argues that federal prosecution of basic cannabis possession has been minimal in recent years, attributing the industry’s success more to federal discretion than state laws.
Progress towards state-level protection for Bitcoin is evident in Pennsylvania, where House Bill 2481, also known as the “Bitcoin Rights” bill, recently passed the House of Representatives with a significant majority. The bipartisan legislation aims to protect residents’ rights to self-custody digital assets and establish guidelines for taxing digital asset transactions. If enacted, this bill would position Pennsylvania as a state actively addressing crypto regulation in the absence of clear federal guidelines.
The passage of the “Bitcoin Rights” bill in Pennsylvania reflects a growing advocacy for state-level crypto protections, especially in critical swing states with a large number of crypto owners. The hope is that Pennsylvania’s actions will influence other states to follow suit, particularly as federal agencies continue to deliberate over digital asset regulation.
While challenges persist due to the supremacy of federal law, the momentum at the state level indicates a concerted effort to provide legal protections for Bitcoin users. The outcome of these initiatives could significantly impact the future regulatory landscape of Bitcoin across the United States.