California’s Governor signed a crypto law to protect unclaimed crypto from being forced liquidated and converted to cash before coming under the state’s custody.
California will become the first state to protect unclaimed crypto from being forced liquidated after its governor, Gavin Newsom, signed legislation. According to the Senate Bill 822, which was authored by Senator Josh Becker, unclaimed property, including digital assets like Bitcoins and Ethereum, should be treated with the same legal framework that governs bank accounts and securities.
This bill, which passed unanimously through both chambers last month before being signed by Newsom, clarifies that digital assets are a form of intangible property governed by the Unclaimed Property law. This law brought much clarity and guidance to the state on how it should handle crypto assets that have been dormant for more than three years, even after multiple contact attempts had failed.
“Earlier versions of the bill would have required exchanges, custodians, and wallet providers to forcibly liquidate customers’ digital financial assets before transferring them to the State Controller’s Office—effectively creating a taxable event for consumers without their knowledge or consent,” Joe Ciccolo, Executive Director of California Blockchain Advocacy Coalition, told a prominent media outlet.
Furthermore, the bill requires the holder of the financial asset to inform the owner of the digital asset 6-12 months before reporting via a Controller-approved form. After the escheatment period is completed, the SB833 specifically says that the holders of the digital asset must transfer the exact asset, the private keys, and the amount in its form–unliquidated, to the controllers within 30 days after the final reporting date.
