Chiara Bianchi
California Governor Gavin Newsom has signed Assembly Bill 1052 (AB 1052) into law, expanding the state’s Unclaimed Property framework to cover digital assets like cryptocurrencies. This marks a significant step toward modernizing property laws to accommodate the digital financial era.
Under the new legislation, any cryptocurrency left inactive for three years on custodial platforms, such as exchanges, must be transferred to state custody in its original form. Importantly, the law prevents automatic liquidation or conversion to cash, ensuring assets remain secure until the rightful owner claims them.
Senate Bill 822 (SB 822), sponsored by Senator Josh Becker, specifically applies to major cryptocurrencies such as Bitcoin and Ethereum. The bill clearly defines digital financial assets as intangible property, providing legal clarity for handling dormant crypto accounts within California’s existing unclaimed property system.
Governor Newsom’s signing of SB 822 has been welcomed by the crypto community. Paul Grewal, Chief Legal Officer of Coinbase, commented, “Thank you [Gavin Newsom] for signing SB 822, which stops the state from liquidating Californians’ unclaimed crypto investments without their consent.”
Role of Licensed Custodians
The law authorizes the State Controller to appoint licensed custodians to safely manage and store unclaimed crypto holdings. These custodians are responsible for maintaining compliance with state regulations while protecting the assets until they are reclaimed.
If no owner comes forward within 18 to 20 months after reporting, the Controller may convert the holdings to fiat currency. The bill specifies that assets shall be liquidated no sooner than 18 months, and no later than 20 months, ensuring adequate time for potential claimants.
Modernizing California’s Property Laws
With SB 822, California joins the growing number of jurisdictions recognizing the unique nature of digital assets. The legislation not only protects investor rights but also provides a clear, structured framework for managing dormant cryptocurrencies, reflecting the state’s commitment to innovation and digital finance.
