The California Assembly has passed Assembly Bill 1052, which would allow the state to seize digital assets like Bitcoin from exchanges if they remain inactive for more than three years under the state’s unclaimed property laws.
The legislation extends California’s existing unclaimed property framework to include cryptocurrencies held on trading platforms, marking a significant expansion of state authority over digital assets. Under current unclaimed property laws, financial institutions must transfer dormant accounts to the state after a specified period of inactivity.
The bill now advances to the state Senate for consideration.
Cryptocurrency advocates have criticized the measure as fundamentally incompatible with the decentralized nature of digital currencies.
The legislation has sparked renewed discussion about self-custody practices among crypto users, with many citing the principle “not your keys, not your coins” — referring to the importance of controlling private cryptographic keys rather than relying on third-party exchanges.
Industry observers view the bill as part of a broader regulatory trend as states grapple with how to apply traditional financial oversight to emerging digital asset technologies. The measure’s supporters argue it provides consumer protection for forgotten or abandoned cryptocurrency holdings.
The bill’s progression through the legislative process will be closely watched by cryptocurrency users, legal experts and digital asset companies operating in California, the nation’s most populous state and a major hub for technology innovation.
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