California Becomes First U.S. State to Protect Unclaimed Crypto from Liquidation
California Governor Gavin Newsom signed Senate Bill No. 822, marking a historic step in digital asset regulation. The legislation prevents unclaimed cryptocurrencies from being automatically liquidated, ensuring they remain in their original form when transferred to state custody. This MOVE contrasts sharply with traditional unclaimed property protocols, which typically mandate conversion to fiat.
Senator Josh Becker and Assembly Member Valencia spearheaded the bill, which updates California's unclaimed property framework to explicitly include digital assets. The law classifies cryptocurrencies as intangible property and establishes clear guidelines for their management. Notably, it relaxes address verification requirements—only the user's state of origin must be identifiable.
Exchanges now face stringent notification requirements. Custodians must alert users six to twelve months before transferring dormant assets to the state, with provisions to reset the abandonment clock upon recipient response. Following confirmation, platforms have 60 days to secure necessary keys for asset transfer.
The policy shift arrives amid market turmoil. October's $19 billion crypto crash underscored the volatility of digital assets, making California's preservation mandate particularly significant. Industry advocates like Joe Ciccolo of the California Blockchain Advocacy Coalition have applauded the measure as a model for other jurisdictions.
