California Passes Law to Protect Unclaimed Crypto Assets
California Governor Gavin Newsom signed Senate Bill No. 822, making California the first U.S. state to protect unclaimed cryptocurrency. The law prevents digital assets from being automatically sold when they enter state custody. Instead, the assets remain in their original form.
The bill, created by Senator Josh Becker and Assembly Member Valencia, updates California’s unclaimed property rules to include digital assets. It classifies these assets as intangible property and outlines how they should be managed. The law also states that a user’s address only needs to indicate the state, not full details.
New Requirements for Exchanges and Custodians
The law requires exchanges and custodians to notify users before unclaimed crypto is transferred to the state. They must send a warning six to twelve months in advance. This notice informs users that their assets may be claimed by the state if unclaimed.
If users confirm their address, the countdown resets, giving them more time to recover their crypto. Exchanges then have 60 days to secure the keys needed to safely move the assets.
Industry Reaction and Broader Technology Policies
Joe Ciccolo, Executive Director of the California Blockchain Advocacy Coalition, praised the law. He said earlier versions would have forced exchanges and custodians to liquidate digital assets, creating taxable events without user consent.
Governor Newsom also highlighted the need for accountability in artificial intelligence development. He urged lawmakers to hold creators and users responsible for any harm caused by AI. California passed additional tech safety bills addressing deepfake content, social media risks, and cybersecurity coordination.
California’s law sets a new standard for handling cryptocurrency. It treats digital assets with the same care as traditional money, helping build user trust and preparing the state for a digital future.
