California Protects Unclaimed Cryptocurrencies
California has become the first U.S. state to establish a clear legal framework for managing unclaimed cryptocurrency assets. The new law, signed by Governor Gavin Newsom, prevents their automatic sale and sets guidelines for their secure custody.
Cryptocurrencies gain legal protection under AB 1052 and SB 822
Governor Gavin Newsom signed Assembly Bill 1052 (AB 1052) on Monday, amending the state’s unclaimed property law to include digital financial assets such as cryptocurrencies. Under the new legislation, cryptocurrencies that remain inactive on custodial platforms for three years must be transferred to state custody in their original form—without forced liquidation or conversion into cash.
Senate Bill 822 (SB 822) further clarifies how assets like bitcoin and ether should be handled after three years of inactivity. The law requires the state to hold these assets as cryptocurrencies rather than converting them immediately to fiat currency.
Clear rules for dormant crypto accounts
SB 822, authored by Senator Josh Becker, introduces a legal framework for “dormant accounts”—those inactive for three years. Cryptocurrencies are now classified as intangible property, removing prior uncertainty about how they should be managed under California’s unclaimed property system.
The State Controller’s Office will oversee the custody of unclaimed cryptocurrencies and may appoint one or more licensed custodians responsible for their safekeeping.
Conversion possible, but not before 18 months
While the legislation protects cryptocurrencies from immediate liquidation, it also defines a conversion window. If the owner does not claim the assets within 18 to 20 months after being reported as unclaimed, the state may convert them into fiat currency.
Crypto community welcomes the move
The crypto community has praised the new law. Paul Grewal, Chief Legal Officer at Coinbase, thanked Governor Newsom on X for signing SB 822, noting that the legislation prevents the state from selling people’s unclaimed cryptocurrencies without consent.
California sets a trend for the rest of the U.S.
The adoption of AB 1052 and SB 822 marks a major step in modernizing California’s financial and property laws, reflecting the growing importance of digital assets in the economy. Experts expect other states to follow suit, bringing greater legal certainty for investors and strengthening trust in the regulated crypto market.
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