I have a service where the end user sends me their bitcoin private keys and I send it back out to a new address when a condition happens (ex. if the weather is raining).

Is this still considered as a money transmitter in the US or NYC? And how is this different from a bitcoin wallet application like blockchain.info that also has your private keys but you also have it too?

  • This seems like a risky system to build! If someone intercepts the private keys, or hacks into your server, all of your customer's funds will be compromised. This is a lot of risk for your users, and a lot of risk/liability for you. – chytrik Sep 12 at 22:57

That's not a very secure system.

You should set up a 1-of-2 multisig address with the user instead and have them send funds to that address. They're still placing a lot of trust in you but they don't have to expose their private key.

As far as your original question goes: I don't think so since they're still technically in control of their funds (just you are as well), it's more like a jointly owned bank account. Of course, I am not a lawyer.

Or better yet (updating this later after thinking about it a bit): Instead, have the user sign a bitcoin transaction, specifying the destination address but have them give it to you without actually publishing it until the condition has been met. That way you don't have control over their funds at all, but you can still pull the trigger on sending a transaction. This has the benefit of only requiring a single tx to complete the whole process.

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