- California has passed Assembly Bill 1052, allowing the state to claim cryptocurrencies left untouched on exchanges for over three years
- The assets will be transferred to a state-appointed custodian but held in their original crypto form rather than being converted or sold
- Owners retain the right to reclaim their digital assets at any time, in line with existing unclaimed property laws
Crypto holders in California may soon find that their holdings are taken by the state after three years of inactivity, according to a new bill. California’s legislature has unanimously advanced Assembly Bill 1052 which brings cryptocurrency under the state’s unclaimed property laws, requiring that the assets on any centralized exchange can be turned over to the state if not acted on during that time period. Crucially, these assets will be preserved in kind—meaning in their original cryptocurrency form—and remain reclaimable by their rightful owners.
Bill 1052 Modernizes Unclaimed Property Laws
AB 1052 is part of California’s broader effort to modernize its unclaimed property statutes by including digital assets like Bitcoin and Ethereum. This means that if there is no activity on a crypto exchange account for three years and the exchange cannot establish contact with the account holder, the law mandates that the assets be transferred to a designated custodian. Unlike traditional processes where assets might be liquidated, these digital holdings will be maintained in their crypto form, ensuring that any appreciation in value remains intact for the owner.
This change mirrors how California currently handles unclaimed bank accounts, checks, and other financial instruments, and also reflects growing recognition by lawmakers that crypto has become a mainstream financial asset that deserves equal consumer protections.
Social Media Coverage Concerns Users
Although the bill has received broad legislative support, some in the crypto community have raised concerns about state involvement, with critics worrying it could set a precedent for overreach into personal digital property:
JUST IN: 🇺🇸 Bitcoin held on exchanges for +3 year will be transferred to the state in California under a law passed by the Assembly – [@Bitcoin_Laws]
Not your keys… 🤨
— Bitcoin Archive (@BTC_Archive) June 4, 2025
However, the bill’s supporters have been quick to clarify that it applies only to assets held on centralized platforms—not self-custodied wallets—and that multiple attempts must be made to contact the owner before any transfer takes place. Bill author Eric Peterson addressed these fears directly, writing, “The big innovation with this bill is that any unclaimed #Bitcoin will stay as Bitcoin and not be liquidated. So you don’t have to worry about losing your gains due to early liquidation. The redemption is in kind.”
Since people are still misunderstand what this bill does, here are all the steps for how the bill functions. This should hopefully dispel a lot of the FUD around this legislation.
✅ Step 1: Asset Must Be Held by a Third-Party Custodian
This law only applies to custodial digital… https://t.co/GdKMteHraX— Eric Peterson (@Eric_Peterson_) June 4, 2025
Having passed the Assembly in a 78-0 vote, AB 1052 now moves to the Senate. If it becomes law, the State Controller must designate a qualified custodian for digital assets by January 1, 2027. This would place California at the forefront of integrating crypto into public policy and could encourage other states to follow suit.
