A new Bitcoin Improvement Proposal (BIP) for a soft fork by core developer Luke Dashjr has ignited controversy on X after critics pointed to a section that appears to threaten legal consequences for anyone opposing the fork.
Published on Friday, the proposal marks the latest flashpoint in the ongoing Bitcoin Core vs. Knots debate — a dispute over Bitcoin’s intended purpose and whether non-financial data should be excluded from the blockchain.
The proposed soft fork seeks to limit certain types of data in Bitcoin transactions for one year while a long-term fix is developed. It’s intended to address growing concerns that malicious actors could embed illegal or unethical content into the blockchain following the Bitcoin Core v30 update.
However, the document’s wording has drawn strong backlash. On line 261, it states that “there is a moral and legal impediment to any attempt to reject this soft fork.”
Then, between lines 270 and 272, the proposal elaborates: “Rejecting this soft fork may subject you to legal or moral consequences, or could result in you splitting off to a new altcoin like Bcash. However, strictly speaking, you are free to choose.”
Some call it a ‘legal threat’
Bitcoin — the world’s first cryptocurrency — was built to challenge traditional financial systems and give individuals greater control over their money. Critics of the new proposal argue that introducing any form of censorship or data restriction goes against Bitcoin’s foundational principle of being a permissionless network.
On Sunday, a user named Bam — the founder of a Bitcoin education platform and a systems engineer — described the proposal’s wording as “Orwellian,” referencing George Orwell’s dystopian novel 1984, which depicts a future dominated by authoritarian control.
Similarly, coder and software engineer Ben Kaufman said that “a fork under the threat of legal consequences is the clearest example of an attack on Bitcoin.”
Canadian cryptographer and computer scientist Peter Todd also weighed in, sharing a screenshot of Dashjr’s comments and claiming it’s “clear he expects his soft fork to be adopted through legal threats.”
Galaxy Digital’s head of research, Alex Thorn, responded to Todd’s post, agreeing that the proposal is “explicitly an attack on Bitcoin — but also incredibly stupid.”
Some users cautioned that if miners and node operators diverge on whether to activate the proposal, the disagreement could trigger a blockchain split.
Others say it’s been misunderstood
While users have always been able to embed small messages in Bitcoin transactions, the recent Bitcoin Core v30 update enables much larger data payloads. The new proposal argues that this change could expose network participants to criminal liability if illegal content is stored on the blockchain.
Several X users suggested that this legal risk is what the proposal’s controversial language refers to — implying that rejecting the soft fork could allow illicit data to persist onchain, potentially leading to “legal or moral consequences.”
Dashjr appeared to back this interpretation, replying to a commenter who claimed it was “illegal to reject the soft fork.” He clarified, “It doesn’t say that. Maybe you can propose a clarification if you think it’s unclear.”
Dashjr later added further context, saying, “‘May’ isn’t ‘certainly.’ Also, for some context, I believe this section came from an earlier draft that didn’t include proactive activation — meaning the opposing chain would definitely contain CSAM — so adding clarification would probably make sense.”
Soft fork may not matter in the end
According to Dashjr, the soft fork proposal is already progressing without any technical objections. However, Peter Todd may have already discovered a way to undermine it. He claimed to have created a transaction embedding the full text of the proposal itself — one that remains “100% standard and fully compatible” with the supposed fix.
Meanwhile, BitMEX Research warned that a malicious actor attempting a double-spend attack could deliberately embed illegal content onchain to “trigger a re-org and succeed with their attack,” effectively creating an “economic incentive” for placing unlawful material on the blockchain.
