California Sets Landmark Crypto Protection Law
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California has become the first U.S. state to formally protect unclaimed cryptocurrency from being forcibly sold.
Governor Gavin Newsom signed Senate Bill 822, a measure ensuring that assets like Bitcoin and Ethereum stay in their original digital form when transferred to state custody.
Authored by Senator Josh Becker, the law updates California’s Unclaimed Property framework to include crypto, placing it on the same legal footing as dormant bank accounts and securities. The bill passed unanimously in both chambers before being signed into law.
Previously, there was uncertainty over how to handle inactive crypto accounts. Early drafts even required exchanges to liquidate assets before turning them over to the state – a move criticized as creating tax and compliance issues. Joe Ciccolo of the California Blockchain Advocacy Coalition said the final version avoided those pitfalls and better protected consumers.
Under the new law, companies must attempt to contact asset owners months before reporting them as unclaimed. If there’s no response, they must transfer the original digital assets – including private keys – directly to the state’s crypto custodian within 30 days.
This makes California the first state to establish a clear, crypto-friendly process for managing unclaimed digital property.
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