California Passes Bill for Crypto Custody Rules

The California State Assembly has passed AB-1052 , legislation that allows unclaimed crypto assets to be placed under state custody after three years.

California’s move to regulate unclaimed digital assets like cryptocurrency enhances consumer protection and aligns state regulations with modern financial realities.

Assembly Bill AB-1052

Assembly Bill AB-1052, introduced by Assembly Member Valencia, addresses the regulation of digital assets considered unclaimed after three years of inactivity. It encompasses cryptocurrencies, stablecoins, and other tokenized assets. The bill specified that such assets would not be liquidated but instead managed by a third-party custodian appointed by the state.

“AB 1052 not only strengthens the legitimacy of digital assets but also modernizes California’s financial regulations and enhances consumer protections. Digital assets—such as cryptocurrency, stablecoins, and tokenized assets—are no longer abstract or futuristic financial instruments; they are here and increasingly used by businesses and consumers. As the world’s fourth-largest economy, California must protect consumers while embracing financial innovation. With the growing adoption of digital assets, we must address the risk of unclaimed property…” — Assembly Member Valencia, California State Legislature California Legislative Analysis

Assembly Member Valencia plays a pivotal role in the bill’s introduction, pushing for the modernization of financial oversight as California embraces financial innovation. This aligns existing unclaimed property laws with digital currencies, offering a new stance on protecting consumer interests and asset integrity.

Implications of AB-1052

The legislation includes implications for holders of cryptocurrency that have been inactive for three years. According to officials, assets like BTC and ETH under California jurisdiction may face new oversight. The bill paves the way for integrating blockchain-based holdings into state property statutes.

While AB-1052 does not allocate new funding or mandate asset liquidation, the assets remain secure but accessible to state oversight. This reflects a growing governmental interest in digital finance, increasing regulatory clarity as the world’s fourth-largest economy takes action in the crypto space.

Historical legislative parallels exist, but AB-1052 is a significant step in incorporating digital currencies into established frameworks. Market participants and developers are advised to take note as this regulatory conversation evolves, impacting future financial, regulatory, and technological landscapes in California. Assembly Member Valencia’s initiative on digital assets may inspire similar efforts in differing jurisdictions.