California is moving to reshape how unclaimed digital assets are handled after the State Assembly unanimously approved Assembly Bill 1052 (AB 1052) on June 3.
The bill, which passed 78–0, would update the state’s unclaimed property laws to prevent dormant cryptocurrencies from being automatically liquidated. Instead, assets like Bitcoin and Ethereum would be held in their native form by a licensed custodian designated by the state.
The bill now heads to the California Senate for further consideration.
New California Bill Protects Dormant Crypto Wallets
The bill only affects digital assets held by third-party custodians such as centralized exchanges or banks. Anyone using self-hosted wallets or holding their private keys directly is entirely excluded from the bill’s reach.
Even for custodial accounts, the law applies only after three full years of complete inactivity. That inactivity must meet two strict conditions: the custodian must be unable to establish contact, and the account must show no signs of ownership.
Additionally, the clock resets with virtually any user activity.
If the account holder logs in, makes a transaction, responds to an email, clicks a verification link, or even contacts the platform about another account, the three-year countdown restarts.
These safeguards ensure that genuinely active or intermittently used accounts cannot be deemed abandoned. Once that full period passes with no contact or activity, custodians are required to notify the state and report the asset.
However, unlike older forfeiture laws, this legislation mandates that the cryptocurrency be transferred in its native form into the care of a licensed state-appointed custodian.
The bill’s provisions also place responsibility on licensed custodians to safeguard these assets, raising new compliance challenges.
Questions around key storage, asset verification, and technical protocols are likely to become focal points in Senate deliberations.
‘Not Your Keys’ Gets a Legal Boost
The bill also clarifies how digital assets like Bitcoin should be handled when left unclaimed, potentially strengthening the principle of “not your keys, not your coins” by requiring clearer custodial accountability.
The legislation arrives as other states also move to define crypto ownership and unclaimed property rights, but with different strategies.
Arizona recently enacted House Bill 2749 on May 7, creating a Bitcoin and Digital Assets Reserve Fund. Under the law, digital assets can be held in their native form if unclaimed for three years.
Qualified custodians are authorized to stake or receive rewards on those assets, with earnings deposited into the new state fund.
The bipartisan bill, championed by House Commerce Committee Chair Rep. Jeff Weninger, marks one of the first formal crypto reserve initiatives at the state level.
Meanwhile, Florida has taken a different path. On May 3, it withdrew two key bills, House Bill 487 and Senate Bill 550, intended to establish a Bitcoin reserve.
The Florida Senate confirmed both proposals were removed from consideration just one day after the legislative session ended, indicating a pause in the state’s crypto ambitions.
Texas is exploring its own frameworks, and Wyoming continues to lead with digital asset-friendly laws. However, the lack of federal clarity still leaves the U.S. with a patchwork of crypto rules.
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