Grasping Assembly Bill 1052
In January 2025, California introduced Assembly Bill 1052 (AB 1052) to amend California’s unclaimed property laws to provide for digital assets including cryptocurrencies. The California lawmakers behind AB 1052 have determined that digital assets should be treated in exactly the same way as a traditional financial asset, including something like bank accounts, stocks, etc., have to this point in the application of California unclaimed property laws. The bill does not allow the state to take or liquidate digital assets at its discretion; it requires the state to hold the digital asset securely until claimed by its rightful owner.
The Misinformation Avalanche
Shortly after the bill was introduced, a tweet from the social media handle for “Tales From The Crypt” podcast inaccurately reported that California had passed a law allowing the state to confiscate idle Bitcoin (or actually, a crypto asset that may or may not be bitcoin) after three years of inactivity. This false story went viral and was viewed over 1 million times. In fact, AB 1052 was not enacted law at this time, and was only allowing for digital assets in to be held to existing unclaimed property law. A state cannot take or seize digital assets for its benefit; a state is only required to retain the digital assets in the original form until claimed by the owner.
California’s Unclaimed Property Laws
Under California law, financial assets are considered unclaimed if there has been no activity or contact with the owner for a specified period, typically three years. Before transferring such assets to the state’s custody, holders like banks or exchanges must attempt to contact the owner. If the owner remains unresponsive, the assets are transferred to the State Controller’s Office, where they are held securely and can be claimed by the rightful owner at any time.
Implications for Digital Asset Holders
With the inclusion of digital assets under AB 1052, cryptocurrency holders should be aware of the importance of maintaining activity in their accounts. Regularly logging in, updating contact information, or making transactions can prevent assets from being classified as unclaimed. Should assets be transferred to the state due to inactivity, owners can reclaim them by providing proof of ownership. Importantly, the state holds these digital assets in their original form and does not liquidate them into cash.
The Importance of Accurate Information
The rapid spread of misinformation regarding AB 1052 highlights the need for accurate reporting, especially in the rapidly evolving digital asset space. Stakeholders, including investors and policymakers, must rely on verified information to make informed decisions. Misinterpretations can lead to unnecessary panic and undermine trust in regulatory processes.
Conclusion
California’s AB 1052 represents a step toward modernizing unclaimed property laws to include digital assets, ensuring they are treated with the same care and legal framework as traditional financial assets. While the bill has sparked discussions and some misinformation, its intent is to protect asset owners and provide a clear process for reclaiming unclaimed digital assets. As the digital economy continues to grow, such legislative updates are crucial for safeguarding the interests of asset holders.
