CALIFORNIA CAN CLAIM IDLE CRYPTO AFTER THREE YEARS OF INACTIVITY

- California’s Assembly passed AB-1052 in a 78-0 vote, classifying inactive crypto held on exchanges as unclaimed property after three years without owner activity.

Key Details:

- Under the bill, inactivity means no transactions, deposits, withdrawals, or account access for three years.

- The state can claim these idle crypto assets but must hold them with a licensed custodian, not liquidate them.

- Owners can reclaim their Bitcoin or other tokens later in their original form. This is meant to protect investors from forced sales without consent.

- AB-1052 also allows Californians to accept crypto as payment for goods, services, and private transactions.

- The law aims to bring digital assets under existing unclaimed property rules, like those for bank accounts or safe deposit boxes.

- Critics argue it threatens privacy and encourages reliance on exchanges, undermining Bitcoin’s core ethos of self-custody.

- Supporters say fears of permanent seizure are overblown and highlight that most states already have similar laws.

- Lawyer Hailey Lennon confirmed unclaimed property laws are common and exchanges comply with them, returning assets when owners claim them.

- If signed, the law takes effect July 1, 2026, requiring crypto businesses in California to be licensed by the Department of Financial Protection and Innovation (a).

- This agency also oversees a related bill, AB-1180, allowing the state to accept crypto payments.