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California Enacts First Law Safeguarding Unclaimed Crypto From Forced Liquidation

The statute applies unclaimed-property rules to digital assets, requiring in-kind custody with time-bound safeguards.

Overview

  • Gov. Gavin Newsom signed SB 822 into law after unanimous passage, updating California’s Unclaimed Property Law to cover digital financial assets.
  • The law bars pre-escheatment liquidation, preserving unclaimed crypto in its native form and reducing unintended taxable events for owners.
  • Holders must notify apparent owners six to twelve months before reporting, with assets deemed unclaimed after three years of inactivity or failed contact.
  • Within 30 days after final reporting, holders must transfer the exact asset type and associated keys, unliquidated, to Controller-selected licensed custodians.
  • The Controller may convert assets to fiat 18 to 20 months after filing, and valid claimants receive either the original assets or net sale proceeds as implementation moves to custodian selection and DFPI oversight.