No they didn’t actually, they turned over the SSL keys in a printed document which would give them access to all users’ data, but the FBI complained that they would have to input it all by hand which could lead to errors and re trials so they forced him to provide with a digital copy, after which he got fined and then decided to close the service.
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https://www.techdirt.com/articles/20131002/17443624734/lavabit-tried-giving-feds-its-ssl-key-11-pages-4-point-type-feds-complained-that-it-was-illegible.shtml
No they didn’t actually, they turned over the SSL keys in a printed document which would give them access to all users’ data, but the FBI complained that they would have to input it all by hand which could lead to errors and re trials so they forced him to provide with a digital copy, after which he got fined and then decided to close the service.