What happens to cryptocurrency sitting in a dormant, unmanaged account?
Can digital assets be considered “unclaimed property,” falling to the state to hold them for safekeeping until the rightful owner can be found?
Sacramento Snapshot
Editor’s note: Sacramento Snapshot is a weekly series during the legislative session detailing what Orange County’s representatives in the Assembly and Senate are working on — from committee work to bill passages and more.
That is the question that the state Assembly overwhelmingly sought to clear up in a recent vote, agreeing to expand California’s unclaimed property law to include digital assets, such as Bitcoin, cryptocurrency or other virtual currency used in private transactions.
Existing law related to unclaimed property doesn’t explicitly include digital assets, according to the fact sheet for AB 1052. But the bill from Assemblymember Avelino Valencia, D-Anaheim, would move digital assets, after three years in a dormant account with undelivered attempts to contact the owner, to the state to hold under its unclaimed property law.
The controller would appoint a custodian to oversee the digital asset, the bill said, until the rightful owners are able to reclaim it.
Assemblymember Avelino Valencia, D-Anaheim, is behind a bill to ensure digital assets are included in California’s unclaimed property law. (Photo courtesy of Avelino Valencia)California’s unclaimed property law already requires the controller’s office to safeguard and return inactive financial assets — dormant bank accounts, insurance proceeds and uncashed checks, for example — to their rightful owners. Corporations, businesses and other entities are required to report these types of property annually to the controller’s office.
“Digital assets,” Valencia said of his bill in its analysis, “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,” Valencia said.
“With the growing adoption of digital assets, we must address the risk of unclaimed property in this space, ensure that the legal status of virtual currency is not unfairly taxed or restricted, and prevent public officials from using their positions for personal gain through the issuance or promotion of digital assets.”
Assemblymember Diane Dixon, R-Newport Beach, said in committee that she believes it to be “an important bill” and gave her support.
The bill is now in the state Senate, after being unanimously passed by the lower chamber.
In other news
• Amid federal immigration enforcement operations and subsequent protests breaking out around Southern California over the past week, Senate Democrats held a rally on the Capitol steps to denounce the ICE raids.
Among them was Sen. Catherine Blakespear, who represents southern Orange County. She said she was proud to join Senate Democrats “to say enough is enough, the Trump administration needs to stop its siege of (California) and its lawbreaking, authoritarian actions. This is not democracy, this is not the American way.”
Republicans, meanwhile, have blamed California’s sanctuary policies and Democratic leadership for any unrest in the state. In a video message in both Spanish and English, Sen. Marie Alvarado-Gil, R-Jackson, said state law prohibiting local law enforcement from working with federal immigration officials “makes California less safe and is the root cause of the rioting and violence we are witnessing.”
• Senate Democrats also chose a new leader last week: Sen. Monique Limón, D-Santa Barbara, who will take over as president pro tempore next year. She will be the first woman of color to hold the role.
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