The Satoshi Action Fund advances efforts to secure state-level protections for Bitcoin self-custody, deploying strategies similar to those used by the cannabis industry to navigate federal regulations. This initiative aims to create “safe havens” for Bitcoin users, providing legal guarantees for the ownership and use of the digital asset.
Dennis Porter, CEO and co-founder of the Satoshi Action Fund, argues that state laws take precedence in the absence of federal laws. Porter stated:
“If federal law conflicts with state law, the federal government is obligated to enforce it and cannot require state or local law enforcement to assist them.”
He highlighted the cannabis industry’s success despite federal prohibition, attributing it to states passing laws protecting the use and possession of cannabis, which the federal government has been reluctant to aggressively crack down on.
According to Porter’s comments, the Satoshi Action Fund is trying to prevent federal action by enacting state laws that protect Bitcoin rights. He said,
“We are creating safe haven states for Bitcoin today instead of waiting for the federal government to act,”
Porter emphasized that waiting delayed the cannabis industry’s progress by decades, a setback he wants to avoid for Bitcoin.
This state-level strategy, according to Porter, has historical precedent in movements such as women’s suffrage, civil rights and gay marriage. According to Porter, these movements gained momentum at the state level before culminating in federal legislation. “Studies support the claim that when there is a surge of activity at the state level, the federal government responds and passes the same or similar legislation,” he noted.
However, some legal experts warn of the limitations of state laws in the face of federal authority. Attorney Joe Carlasare pointed out that federal law takes precedence over state law in most cases. “It doesn’t matter what laws a state passes if the Fed decides to preempt them,” Carlasare said. However, he acknowledged that he believes the federal government cannot legally ban Bitcoin self-management.
Furthermore, in response to Porter, Carlasare continued: “No state passed a law (again, still just a bill) yesterday, Dennis! An election stunt was successfully carried out and you claimed, for sensational reasons, that this would ‘shift the election.'” Carlasare argues:
“The cannabis comparison is weak. Possession is still illegal under federal law, but the Fed rarely prosecutes basic possession (it hasn’t for years). That’s why cannabis ‘thrives’ – not because of state laws. The FBI is focusing on prosecuting its large-scale trafficking.”
Progress toward state-level protection for Bitcoin
Amid these discussions, Pennsylvania has taken an important step by passing House Bill 2481, also known as the “Bitcoin Rights” bill. The bipartisan legislation, which passed the House of Representatives on a 176-26 vote, aims to protect residents’ rights to self-custody of digital assets and establishes guidelines for taxing digital asset transactions.
As previously reported, the bill now heads to the Republican-controlled Senate and, if passed, would position Pennsylvania among the states proactively addressing crypto regulation without clear federal guidelines.
The bill’s passage reflects the growing push for crypto protection at the state level, supported by groups focused on integrating Bitcoin into mainstream financial systems. Pennsylvania, a critical swing state with an estimated 1.5 million crypto owners, has become a focal point for these efforts. The Satoshi Action Fund hopes the state’s actions will influence other states to take similar action, especially as federal agencies such as the Securities and Exchange Commission and the Commodity Futures Trading Commission continue to deliberate on the regulation of digital assets.
While challenges remain due to the supremacy of federal law, momentum at the state level signals a concerted effort to create legal protections for Bitcoin users. The outcome of these initiatives could shape the future landscape of Bitcoin regulation in the United States.
