California Plans State Custody for Unclaimed Bitcoin

California may seize unclaimed Bitcoin as part of SB 822, with the State Controller holding discretion in custody decisions.

The legislation impacts unclaimed digital assets, particularly raising questions about state financial strategies and asset management under uncertain seizure scales and conditions.

California’s SB 822 Targets Unclaimed Bitcoin

California has introduced SB 822, aimed at addressing unclaimed digital assets. The key development involves the potential state custody of Bitcoin if deemed unclaimed.

The main entities include the California State Legislature and the State Controller’s office. The bill mandates a process for reporting and transferring these assets.

“Once a holder has reported to the Controller that it is holding covered digital financial assets, it must transfer the assets within 30 days to the Controller’s cryptocurrency custodian. The Controller retains the discretion to decline to take custody of the assets if it determines that doing so is not in the best interest [of the state].” — Senator Josh Becker, California State Legislature

Legislation Signal New Asset Management Direction

This legislative action could significantly affect holders of unclaimed digital assets in California. The policy signals a new direction in handling such assets.

While financial markets are observing the move, there is concern about implications for asset management and potential economic outcomes.

Expanding Unclaimed Property Laws to Digital Assets

California’s approach is consistent with established unclaimed property laws but now extends into digital asset management. Other U.S. states consider similar policies.

Past experiences with asset forfeiture in other domains and states highlight the potential administrative challenges and financial risks in executing such legislation.