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CRYPTO CUSTODY & CONTINGENCY
WHITE PAPER
AttorneyBlockChain
What is AttorneyBlockChain?
AttorneyBlockChain (ABC) is a trustless blockchain of attorneys (multi-signature) who are based around the world and managed by a US law firm, under the zero-knowledge-proof principle, allowing to store highly confidential information (passwords, seed phrases, etc.), and to execute complex, ongoing contingencies.
A BlockChain Attorney:
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Holds a Partial Encrypted Key (mixed with false parts, sharded or raid-striped),
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Has no access to a decryption protocol,
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Has no access to a decryption software,
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Has zero knowledge of the nature of the asset, its value, the platform where its stored, past or anticipated transactions, identities of other BlockChain Attorneys, their countries, their firms,
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Is located in a different country (one BlockChain Attorney per country and per law firm).
Contingencies
A non-exhaustive list of contingencies that ABC manages:
Loss of Password
Incapacity
Multiple Beneficiaries
Corporate Custody
Transferable Ownership
Evolving Orders
Collective Owning
Trust Events
Legal Action (Subpoenas,
Court Orders, Law Suits)
Natural Disaster
Governmental Action
Hostile Takeover
Incompetence
Guardianship
Incarceration
Ransom Demand
Intestate/Testate Death
The Pain
Approximately 20% of all Bitcoins are irretrievably lost due to lost private keys (held both in hot and cold storage), which represents a range of between $3.6 and $4.2 billion, a new study says.
There are many reasons, and they are not a subject of this paper, why crypto assets are being held not only in self-custody, but in multiple digital self-custodial wallets. Most of the legacy wealth, accumulated prior to development of regulated centralised exchanges, is not rushing to those emerging platforms; such swaps, exchanges, payment providers and leveraging solutions are currently accumulating only newly earned or/and corporate assets.
Some of the reasons for the legacy crypto wealth to remain and continue to swell in self-custody is that those assets might be historically divorced from the identity of the holder, which the latter may find infallible, considering the prevailing randian-mises ideology of crypto maximalists; another- that the self-custody layers long have been allowing for the range of investment instruments, such as swaps, staking, NFTs, micro-payments, with lower costs comparing to the regulated custodial solutions, where the user bears the tax of regulatory compliance of the incorporated centralised platform; exiting those legacy wallets and exchanges might be unjustifiable, both economically and ideologically, for such crypto crowd.
The corporate custodial solutions of vendors, such as wealth fund administrators, offer either a read-only access for verification purposes, and/or a multi-signature-full-access to the asset option, where the (two or three) signatories are required to effectuate a transfer exceeding a certain threshold value. In these settings the assets are fully exposed to the inherited risks where all signatories have knowledge of the nature of the asset, its value, the platform where its stored; past, current and anticipated transactions, and of identities of other key holders, unlike in the AttorneyBlockChain, where every BlockChain Attorney has zero knowledge of any of those, and other, parameters, and holds only a Partial Encrypted Key (mixed with false parts), without an access to a decryption protocol and software.
While the legacy crypto fortune overwhelmingly belongs to geeks, crypto punks, and outlier investors, the new generation entering the field from the floodgates of video gaming, while rapidly morphing into the rich metaverse and NFT’s (non-fungible token) existence, is inherently savvy, susceptive to the “freedom & money” flag of the crypto world, intrinsically sceptical about any parental or big brotherly attempts at regulating their internet freedom and metaversal life. This most advanced NewGen, inspired by the Nakamoto’s legend, appears to follow the footsteps and the ideology of freedom and opportunity for the bankless, adopting self-custody on the fly. In addition, if we imagine that no self-custody will ever be in use, the whole blockchain concept would become irrelevant.
There is no available data, but common sense, our own experience, and our private conversations conform to the understanding that the number of wallets per one crypto holder ranges from 7 to 15 wallets. Which makes it hardly feasible for a crypto holder to use the Bitcoin WIKI advice on how to store lengthy passwords and seed phrases that we cite (underscored) below; but even if the holder does as WIKI says, it would not solve any contingency problems, such as loss of capacity or transfer of ownership.
Bitcoin
Bitcoin WIKI reads: “Wallet software will typically generate a seed phrase [12 or 24 words] and instruct the user to write it down on paper... Seed phrase is a list of words which store all the information needed to recover Bitcoin funds on-chain. Most people write down [seed] phrases on paper but they can be stored in many other ways such as memorizing, engraving or stamping on metal, writing in the margins of a book, chiselling into a stone tablet or any other creative and inventive way... Anybody else who discovers the phrase can steal the bitcoins, so it must be kept safe like jewels or cash… In the past many people have accidentally lost bitcoins because of failed backups, mistyped letters, forgotten hard drives, or corrupted SSD devices. It's also important to protect the seed from accidental loss.”
(Optional reading:
Ethereum
There are two major types of accounts in Ethereum: External Accounts and Contract Accounts. External Accounts are those accounts that are secured with a private/public key pair + a password. If a user owns Ethereum and doesn't leave it to the custody of a centralized exchange, the user controls an External Account. Contract Accounts have associated code and are also called Smart Contracts. External Accounts can call their functions and the contract reacts to them according to its internal rules. Both types of accounts have an address, a 40 character identifier that looks like this:
0x2910543Af39abA0Cd09dBb2D50200b3E800A63D2
For External Accounts, the address is derived from the public key. For Contract Accounts, it is derived from the address of its creator + additional data (the nonce). Most importantly: you don’t get to choose or create your account address, nor do you choose a seed phrase for your Ethereum wallet. The latter applies to Bitcoin wallets also.
Altcoins
Ethereum wallets are a gate to layer two platforms: bridges, swaps, exchanges that allow swaps to altcoins, staking, and many other investment options, including NFTs. Such bridges sync with ETH wallets and request the same passwords as an ETH wallet.)
AttorneyBlockChain’s Definitions
AttorneyBlockChain Professional Corporation (ABC)
ABC is a US law firm, a Professional Corporation (P.C.) based in Manhattan, New York. Its attorneys are licensed in New York, California and some other states. ABC develops and manages technology, smart contracts; chooses, verifies, contracts and trains licensed overseas attorneys and firms with good standing with the bar associations and courts of their respective countries, to provide AttorneyBlockChain services to its clients. ABC never has any access to any parts of Client’s Keys. ABC develops contingency plans for a Client and for each BlockChain Attorney, and their respective law firm.
BlockChain Attorney (BCA)
BCA is licensed to practice law, backed by their respective law firm in select countries outside the US (there can be only one BCA per country and per law firm), and follows a consensus protocol managed by the US-based law firm ABC (auto-redundancy). Each attorney is vetted by ABC based on his/her country’s Bar Association admission/license, good standing, court admissions, courts’- and other records, attorney conduct, professional responsibility, training, reputation, size and specialization of the law firm where BCA is a member. BCA’s law firm contractually agrees to execute a contingency plan for their BCA, and to keep their BCA’s role confidential.
Encrypted Partial Key
Collectively passwords, seed phrases, secret questions/answers, key words, account numbers, wallet and/or platform (swaps, exchanges) names, etc., where each password or seed phrase is divided in multiple parts, mixed with false parts, raid-striped (or sharded), and encrypted using ABC technology. Each part, confidentially and independently of other parts, is deposited with an overseas BCA. If one part is irretrievably lost (due to a natural disaster, a 911-type of event, etc), another raid-striped (sharded) Encrypted Partial Key will remain in custody of other BCAs in other countries and will be retrievable.
Zero Knowledge Proof
At all stages BlockChainAttorney has zero knowledge about:
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the content of the asset behind the Encrypted Partial Key;
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the platform (wallets, swaps, exchanges, etc.) where the asset is being held;
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whether the Encrypted Partial Key in his custody is true or false;
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how many true parts has the Key;
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what is the order number of the Encrypted Partial Key BCA holds;
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how many BCAs are engaged by the client;
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identities of other BCA’s (each law firm can have only one BCA, and each country can have only one law firm with a BCA);
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in which law firms other BlockChainAttorneys work;
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in which countries other BCAs are located (each Encrypted Partial Key is deposited in different country).
Trustless Blockchain
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The Key deposited with each BlockChainAttorney is only a part (⅕, 1/10, 1/20, etc) of the full Key;
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The Encrypted Partial Key is mixed with false parts;
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The Partial Key is encrypted;
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See “Zero Knowledge Proof” above;
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BCA needs a consensus of all BCAs who hold true parts of the Key, and of ABC, to release the Encrypted Partial Key to the Client or their beneficiary.
Consensus Protocol
After creating a contingency plan with ABC, a Client deposits Encrypted Partial Key to each BCA directly, by following a consensus protocol enforced by ABC. The consensus protocol also regulates the multi-signature retrieval of the Key by the Client or their beneficiaries.
Vertical Blockchain
Each BCA and their respective law firm contract only vertically with ABC. Each BCA has zero knowledge of another block- the identity of any other BCAs holding Client’s other Encrypted Partial Keys, their law firm, or the country in which they reside and conduct business.
Self-Healing Setup
Protocols include contingency plans for each BlockChainAttorney and ABC’s management, executed by their respective law firm in case of a triggering event (incapacity, retirement, death of an attorney).
ABC’s Functions
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Develops and maintains technology, such as:
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Technology and protocols provided to BCAs to effectuate depositing, storage and release of Client’s Encrypted Partial Keys;
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Protocols of verifying identity of the Client, and/or their beneficiaries;
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Technology provided to the Client and their beneficiaries to encrypt/decrypt Client’s Key(s);
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Protocols identifying and confirming an occurrence of a triggering contingency event, free will (or absence of free will impediments) of the Client requesting the Key; authority, an agreement of multiple owners, an approval of a corporate body requesting an access to the Client’s Key;
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Contingency protocols for ABC and all BCA attorneys.
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Multi-signature consensus protocol of depositing, storing, and releasing the Client’s Encrypted Partial Keys;
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Provides a Client intake under attorney-client confidentiality under NY or CA state laws or/and The Federal Rules of Civil Procedure;
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Clears potential conflicts of interests;
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Designs a Client’s contingency plan;
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Enforces protocols and contingency planning for the Client, BCAs and ABC;
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Manages and maintains the AttorneysBlockChain.
BlockChainAttorney’s Functions
BCA’s functions and duties are:
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To store the Encrypted Partial Key in the designated order following the confidential AttorneyBlockChain protocol;
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To not disclose the Encrypted Partial Key to anyone, except to the Client or his beneficiaries, under the protocol;
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To not disclose the Encrypted Partial Key to ABC;
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To not disclose the Encrypted Partial Key to another attorney, unless under the AttorneyBlockChain’s contingency event (incapacitation, retirement of BCA), and only after alerting ABC and the Client;
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To not disclose the Encrypted Partial Key to the Client’s beneficiaries until ABC’s investigation of the triggering event is completed, the event is defined and confirmed by a secured confidential AttorneyBlockChain protocol, and the consensus of all BCAs who hold true parts of the Key, has been reached;
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To disclose the Encrypted Partial Key to the Client directly and confidentially after the Client’s identity has been confirmed by the confidential AttorneyBlockChain protocol and all holding BCAs signed off on the validity of Client’s identity, authority, absence of Client’s free will impediments.
Highlights of the Locking System
Each Encrypted Partial Key is deposited directly by the Client with each BCA, under attorney-client confidentiality, by following the ABC’s protocol, without involvement of an electronic transmission or any other person or firm. This procedure also excludes the US law firm from any access to the Key.
ABC connects BlockChain Attorneys holding Encrypted Partial Keys with the Client, but NOT with each other, and alerts the Client or their heirs or assigns about all relevant events, including about any attempts at gaining access by anyone, including in legal actions, such as subpoenas.
In addition to the Client alerting their beneficiaries about storing a contingency plan with ABC, ABC constantly and routinely scans the web for the names of its clients in case they appear in accident reports, police/court reports, obituaries, etc, and for invocation of wills and trusts by their heirs, and will contact heirs, assigns, holders and beneficiaries of their wills/trusts/estates, as (and if) instructed so by the Client in their contingency documentation.
In case of incapacitation/incompetence/guardianship AttorneysBlockChain will conduct an investigation, which will include a physical visit of an attorney to the client- in a medical, nursing facility or at home; conversations with the Client and Client’s doctors, a visit and a review of medical records by an independent doctor assigned by the AttorneysBlockChain. The court’s deliberation finding incompetence and assigning a guardian, while legally sufficient, will not be factually sufficient, unless a Client instructs otherwise.
The BCA’s countries are those who have independent court systems and strict bar admission, professional responsibility and attorney conduct rules and procedures. The Client may choose to randomise the pick of the countries/firms or pick them individually.
Q&A: Why does ABC use attorneys if its blockchain is trustless?
1. Client enjoys the attorney-client privilege in creating a contingency plan, depositing and retrieving Partial Keys;
2. Attorneys are under a legal obligation to keep Client's information confidential, including the information even about being retained by the Client, and the nature of the Client’s case. Attorney’s protocols include holding the fact of being a blockchain attorney confidential, too. Breach of duty of confidentiality is a sanctionable event and may cost a license and a high-value malpractice suit to an attorney;
3. Attorneys’ professional license is an asset that may be priced higher than many assets entrusted to them, especially accounting for the combined licenses of 20+ attorneys storing one Client’s Encrypted Partial Keys. Considering that no attorney in the blockchain ever knows the value of an asset stored in crypto contingency, or each other, this solidifies the layers of security further:
---Even if we assume that each attorney’s worth is $1mln (which might be less than a one-year revenue of a litigator), theoretically speaking, to corrupt 20 attorneys one must prove to all of them that:
1) the targeted wallet contains more than a $20mln worth asset,
2) the Encrypted Partial Key belongs to that wallet,
3) the thief who supposedly could eventually obtain access to the asset by committing a crime and corrupting all blockchain attorneys, corrupting the US law firm, hacking the decryption protocol and the encryption software, is to be trusted to voluntarily share the wallet’s asset with 20+ co-conspirator-attorneys, who, again, do not know each other;
4) the thief could be trusted to overcome the high hurdles of logistics: simultaneously transferring some [Bit]coin into 20 self-custodial wallets of attorneys, which is usually done in multiple batches, with small trial amounts, which multiplies the number of transactions to at least 40, and
5) to resolve the problem of the hushed fingerprints of all these transactions recorded in every block of the public blockchain.---
4 Attorneys have an access to the Client's contingency plan which must be held confidential;
5. Attorneys act as trustees in regards to the partial information they store;
6. Attorneys are trained to be meticulous, detail-oriented, diligent, suspicious and responsible- the qualities essential to execute ABC protocols;
7. Attorneys have developed practices, which they in some cases have to report and prove in courts, around keeping their colleagues in the same law firm “behind the wall,” to guard the Client’s information from conflicting interests.
Q&A: Why not hold all Partial Keys in US law firms?
1) Assuming a hostile action by any adversary (i.e. from an aggrieved partner), although it would be hard, but still possible to target in any illegal or legal action all US firms simultaneously, but hardly feasible if those law firms are in 20 countries;
2) The Client will be alerted of such an action happening in any block or in the US firm, and will have plenty of time to respond to such action;
3) It makes it useless even to target the US law firm who has zero exposure to the Client’s Keys: AttorneyBlockChain Professional Corporation, a managing US law firm, never has any access to any parts of Client’s Keys;
4) Attorneys of one country mingle in the same bar associations; are under a mandatory self-education requirement, which results in their populating multiple niche specialty professional forums, increasing the probability of them discovering each other’s role as a BlockChain Attorney.
Q&A: Will ABC use AML/KYC?
The attorney-client privilege does not attach where an attorney knows or has a reason to know that his or her advice or work will be used to commit a crime. Therefore, AML/KYC are essential parts of ABC’s intake procedure.