Digital Asset Recovery

Blockchains are not different from any technology when it comes to law

A Blockchain based on the Proof-of-Work consensus specified in the Bitcoin protocol replaces the trusted intermediaries in a value exchange network with non-trusted nodes that are agnostic to the trading activities the transactions represent.

It allows for open and permissionless network usage by anyone willing to pay the transaction fees. But it makes the system vulnerable to many possible attack vectors, including publishing malicious content on the public ledger, theft of keys and other frauds.

The Bitcoin protocol addressed this using a messaging system termed the Alert System. This enabled nodes to exchange messages regarding the maintenance of the network's health and protection from any malicious behaviour. The recently established Digital Asset Recovery process implements one of the Alert System's use case with a standardised system of governance for the blockchain network. It also acts as an interface to the Judiciary and legal system in the network, providing a recourse mechanism to innocent victims of illegal activities.

BSV is the only blockchain that allows legal recourse for lost asset (token) recovery to legally rightful owners by design. The same system can also freeze assets based on court injunctions and legal notices. This process enables the blockchain system to work under precisely the same legal system that any financial system currently is subjected to in law. It also discourages any illegal activity that the open and public ledger can face by malicious actors.

Every node in the network will maintain a Blacklist containing asset freeze and recovery orders issued by courts. These orders could involve UTXO addresses requested by the court to be frozen due to their involvement with an illegal act in law. There could also be an Asset recovery order which could involve the reassignment of funds from a UTXO to a recovery UTXO, possibly for recovery of theft of funds from the rightful Owner via court case judgement. This system describes the following attributes of a blockchain system.

1. The existing legal system dictates ownership of funds, and blockchain tokens follow the same rule.

2. Any illegal usage of a blockchain is disincentivised as funds and addresses are easy to freeze, and recoveries can be made quite swiftly.

3. Nodes are obligated to follow their local jurisdiction's court orders, and this way, they are also regulated by the same jurisdiction.

Currently, the BSV node software ships with digital asset recovery functionality. Its implementation in legal terms is a work in progress, and this page will be updated with further information once it is available