California Assembly moves to claim custody of inactive crypto assets with new bill

California lawmakers passed AB 1052 on Tuesday in a 78-0 vote, giving the state the mandate to hold crypto assets that remain unclaimed for 3 years in exchange platforms. The event sparked mixed reactions on social platforms, with critics arguing that there has been a misconception about what the bill’s finer details aim to achieve. 

The draft legislation will move to the Senate, where it could be modified, rejected, or signed into law without changes. If signed into law, cryptocurrencies would be subject to the unclaimed property law, which has the same rules governing the ownership transfer of assets such as bank accounts and safe deposit box holdings.

The bill does not allow the state to liquidate those unclaimed crypto assets. It can only be held by a custodian for customers to reclaim later. 

California bill AB 1052 aims to regulate digital payments to protect consumers

According to the bill submission AB 1052, cryptocurrency holders must perform an act of ownership interest at least once every 3 years to prevent their tokens from being subject to the unclaimed property law.

The bill defined those actions as conducting transactions involving their digital asset accounts or accessing them electronically.

Since @SimplyBitcoinTV and @TFTC21 have had some misunderstandings on AB 1052 which passed the California Assembly last night, I have put together an explainer thread about how this protects #bitcoin for the citizens of California.

Let’s say it’s January 2015.

You’re curious… pic.twitter.com/MLS6BsgwtH

— Eric Peterson (@Eric_Peterson_) June 4, 2025

California’s unclaimed property law is intended to protect consumers, who can reclaim their assets free of charge from the state’s custody.

According to Eric Peterson, the bill’s author and a policy director at Satoshi Action Fund, the bill only applies to third-party exchanges, not private custody. He noted that under the current legal regime, if an exchange fails to contact its client for over three years, it could potentially liquidate the user’s assets.

Peterson explained that the bill anticipated a problem that may arise if an exchange turned the assets over to state custody instead of liquidating them; the exchange might try to convert them to fiat first. He assured the people of California that the assets would stay in government custody as Bitcoin to preserve value.

He argued that since crypto assets like Bitcoin could appreciate over time, users who would later reclaim their assets would benefit from the gains rather than receive the fiat value of the assets at the time of liquidation.

Hailey Lennon, a regulatory counsel at Coinbase, reiterated Peterson’s point, saying that this type of law is common. She added that most states in the U.S. have unclaimed property laws that exchanges comply with, and crypto assets are returned to the owner once they contact them. 

California bill AB 1180 seeks to complement AB 1052

California Assembly Bill 1180, which passed by a 68-0 vote on June 2 on its third reading, would require the Department of Financial Protection and Innovation (DFPI) to create rules that allow state funds and transactions under the Digital Financial Asset Law (DFAL) to be paid in crypto.

The DFPI would be tasked with tracking all cryptocurrency transactions, including regulatory and technical issues, and reporting by 2028. The DFPI would supervise license systems and ensure consumer protection and financial innovation.

AB 1052 would make the use of digital assets a valid and legal form of payment in private transactions and prevent public entities from restricting or taxing digital assets based on their use as payment methods.

Senator Ben Allen supported giving more attention to crypto interests in California.

Colorado, Florida, and Louisiana have been at the forefront of state-level trends toward blockchain integrations. The state of Louisiana started accepting crypto payments in September 2024. John Fleming, Louisiana Treasurer, said that people could make payments for government services using digital currencies. 

Abroad, Dubai has taken the front seat by integrating crypto into the economy. In May, Dubai’s Department of Finance agreed with Crypto.com to allow citizens to pay government fees in digital currencies.

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