California authorities will be able to seize unclaimed cryptocurrencies from exchanges

What’s new? On June 3, the California Assembly passed bill number 1052 by a vote of 78 to 0, which would make cryptocurrency subject to the state’s unclaimed property laws and allow authorities to take possession of cryptocurrency in a user’s exchange account if they have not committed an “act of ownership interest” within three years.

Information on the Assembly website

What else is known? Such acts include buying or selling, depositing, or withdrawing funds from an account, logging into an account, or performing any “other action that reasonably demonstrates to the holder that the owner knows that the property exists.”

Thus, assets held in an exchange and unclaimed for 3 years would be turned over to the state and could then be claimed by the owner

Another part of the bill would allow California citizens and businesses to accept cryptocurrency as a form of payment for goods and services, as well as use it in private transactions.

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The bill now goes to the Senate, the upper house of the state Legislature, for consideration. Senators will be able to amend it, reject it, or send it to Governor Gavin Newsom for his signature or veto.

If passed, the law will go into effect on July 1, 2026, and will prohibit anyone, without exception, from engaging in the business of digital financial assets without a license from the Department of Financial Protection and Innovation.

The crypto community was divided on the new draft, with critics calling it an abuse of power and others arguing that there had been a misunderstanding of its purpose.

Eric Peterson, the policy director at the lobbying non-profit organization Satoshi Action Fund, who helped draft an earlier version of the document, explained:

“What it does is update the unclaimed property laws so when your Bitcoin is turned over as unclaimed property from an exchange, it stays in the form of Bitcoin rather than being liquidated. You can then get it back from California in Bitcoin.

Instead of selling your Bitcoin after 3 years of inactivity, custodians must transfer your actual BTC to a licensed custodian selected by the state,” Peterson added. “The Bitcoin is held in native form, not converted to dollars.”

Source: X.com

According to Peterson, California already has similar laws for dormant bank and brokerage accounts. The new law also does not affect users who choose to self-store their cryptocurrency.

HaileyLennon, a former regulatory consultant for crypto exchange Coinbase, also said that similar laws already exist in other states:

“Most states have unclaimed property laws that exchanges comply with. It’s returned to the owner when the owner reaches out to the state.”

Source: X.com