California’s lower house has passed a sweeping crypto payments-regulating bill that would also allow the state to take idle crypto holdings from exchanges if an owner hasn’t accessed their account in three years.
The California State Assembly passed Assembly Bill (AB) 1052 in a 78-0 vote on June 3, which would make crypto subject to the state’s unclaimed property laws and allow California to take possession of crypto in a user’s exchange account if it hasn’t performed “an act of ownership interest” over three years.
Such acts include making a transaction like buying or selling, depositing into or withdrawing from the account, accessing the account, or taking any “other action that reasonably demonstrates to the holder that the owner knows that the property exists.”
The other part of the bill would allow California individuals or businesses to accept crypto as a form of payment for goods, services and the use of crypto in private transactions.
🇺🇸 JUST IN : California Assembly passes bill to regulate Digital Assets under ‘Unclaimed Property’ law.
The bill now moves to the Senate.
Law explained: Assets left on an exchange for 3 years will transferred to the state, and can then be claimed by the owner. pic.twitter.com/u9XftO0XRy
— Bitcoin Laws (@Bitcoin_Laws) June 4, 2025
The bill now heads to California’s Senate, where it could be modified, rejected or passed to Governor Gavin Newsom to sign into law or veto.
If passed, the law would come into effect on July 1, 2026, and prohibit anyone without an exemption from engaging in digital financial asset business activity unless licensed by the Department of Financial Protection and Innovation.
Crypto users mixed on bill
Opinions on the new legislation have been mixed across social media with critics calling the bill an overreach of power, while others argued there had been a misconception about what the finer points of the bill want to achieve.
Eric Peterson, a policy director at the pro-Bitcoin nonprofit organization Satoshi Action Fund, who helped draft an earlier version of the law, said there have been some “misunderstandings.”
“What it does is update the unclaimed property laws so when your Bitcoin is turned over as unclaimed property from an exchange, it stays in the form of Bitcoin rather than being liquidated. You can then get it back from California in Bitcoin,” he said.
“Instead of selling your Bitcoin after 3 years of inactivity, custodians must transfer your actual BTC to a licensed custodian selected by the state,” Peterson added. “The Bitcoin is held in native form, not converted to dollars.”
Related: California moves forward bill to accept crypto for state payments
California already has similar laws in place for inactive bank accounts and brokerage accounts or equivalent, according to Peterson. The new law also doesn’t affect users who have opted to self-custody their crypto.
Satoshi Action Fund founder Dennis Porter chimed in as well, and said it’s crucial to “note that many states have a similar broken process that needs to be fixed.”
Hailey Lennon, a former regulatory counsel at crypto exchange Coinbase, also said similar laws already exist in other states.
“Most states have unclaimed property laws that exchanges comply with. It’s returned to the owner when the owner reaches out to the state,” she said.
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