California bill targets dormant crypto assets on exchanges

The measure received unanimous approval in a 78-0 vote and now moves to the Senate, where it may be amended, rejected, or passed into law. 

If enacted, the AB 1052 bill would place cryptocurrencies under the scope of the state’s unclaimed property law, rules already applied to dormant bank accounts and safe deposit boxes. The law mandates that assets deemed abandoned must be transferred to state custody, where they can later be reclaimed by the original owner without cost. 

However, the legislation explicitly prohibits the state from liquidating any digital assets it takes custody of. Instead, these assets would be retained in their original form until claimed by rightful owners.

Complementary legislation and regulatory oversight

In addition to AB 1052, lawmakers also advanced AB 1180, which seeks to expand the state’s regulatory framework for digital assets. The bill passed with a 68-0 vote and calls for the California Department of Financial Protection and Innovation (DFPI) to develop rules for handling state-level transactions involving cryptocurrencies. Under this bill, the DFPI would also be responsible for monitoring and reporting on all crypto-related activity under the Digital Financial Asset Law (DFAL) by 2028, including licencing systems and consumer protection measures. 

If implemented, AB 1052 would affirm the legality of using digital assets for private transactions in California and prevent local authorities from restricting or taxing their use solely based on their nature as payment instruments. 

A representative from Coinbase noted that unclaimed property laws of this kind are already standard across most US states, where digital assets are typically returned once the owner re-establishes contact. They added that the bill’s core principle reflects existing norms rather than introducing a new regulatory burden. 

A representative from a cryptocurrency policy organisation that co-authored the bill stated that it targets third-party exchanges only, excluding individuals who self-custody their assets. According to the representative, the bill aims to prevent platforms from liquidating unclaimed digital assets after prolonged inactivity, which is currently allowed. They explained that in its intended form, the law would require exchanges to transfer such assets directly to the state without converting them into fiat currency. 

They also argued that retaining crypto in its original form, rather than cashing it out, preserves any potential appreciation in value, ultimately benefiting the user who reclaims it later.