- California’s Assembly has passed a bill to seize unclaimed crypto after three years on custodial platforms
- AB 1180 enables the pilot use of digital currencies for paying state fees and transactions
In a unanimous 69-0 vote, the California State Assembly has advanced Assembly Bill (AB) 1052, a proposed law that would authorize the state to seize unclaimed digital assets, including Bitcoin [BTC], if left untouched for three years.
The legislation marks a significant step towards incorporating cryptocurrencies into existing unclaimed property laws, treating them similarly to abandoned bank accounts or uncollected tax refunds.
With the bill now heading to the Senate for consideration, the move has sparked debate over government control and digital asset rights. It also raises questions about how states will handle dormant crypto holdings in the future.
What is AB 1052 all about?
Introduced by Democratic lawmaker Avelino Valencia, the Bill 1052 aims to modernize California’s approach to unclaimed property by explicitly including digital assets like cryptocurrencies, virtual currencies, and other blockchain-based holdings.
It treats these assets the same as traditional ones, such as dormant bank accounts and safe deposit boxes.
Hence, if the legislature passes the law, the state will have the authority to seize digital assets left unclaimed on centralized exchanges for three years, while also allowing the original owners to reclaim them later.
Earlier drafts of the bill addressed self-custodied crypto wallets, but lawmakers removed those provisions – Narrowing the focus exclusively to custodial platforms.
Mixed reactions to the bill
Supporters say the bill creates a fair system by having custodians safeguard unclaimed cryptocurrencies like Bitcoin, instead of liquidating them. This, they say, will give rightful owners a chance to reclaim their holdings without incurring financial losses.
Meanwhile, critics in the crypto community, especially those who follow the cypherpunk philosophy, see the bill as a threat to privacy and self-sovereignty. These are both principles that lie at the heart of the Bitcoin movement.
However, despite the backlash, proponents insist the fears are overblown and argue the bill simply updates existing escheat laws to match the evolving landscape of financial assets.
California’s back-to-back crypto moves
Here, it’s worth noting that this coincided with the California State Assembly unanimously approving AB 1180 – A forward-looking bill also introduced by Assembly member Avelino Valencia.
This legislation proposes a pilot program that would allow digital currencies to be used for paying certain state fees and transactions.
With this move, California aligns itself with other crypto-progressive states like Wyoming, Florida, Texas, and New Hampshire – All of which are actively shaping digital asset regulations.
