California Crypto Bill, Passed by Assembly for Inactive-Assets

How the New California Crypto Bill Will Affect Long-Inactive Wallets?

The California Assembly has recently passed a new bill called AB-1052. This law would treat long-inactive cryptocurrencies as “unclaimed property.” If someone does not interact with their crypto account for three years, the state can take custody of those digital assets. But importantly, the assets will not be sold or converted to cash. Instead, they will be held safely so that owners can claim them later.

What Does AB-1052 Say?

AB-1052 requires that cryptocurrency holders show activity in their accounts at least once every three years. This activity could be making a transaction or simply logging into the account electronically. If no action is taken within that period, the crypto exchange where the assets are stored must hand them over to the state. The state then keeps the cryptocurrency as unclaimed property.

The bill passed the Assembly with a unanimous vote of 78-0. It will now move to the California Senate for further discussion. Lawmakers there can change, approve, or reject it.

If AB-1052 becomes law, crypto like Bitcoin and others will fall under the state’s unclaimed property rules. These rules already apply to things like forgotten bank accounts and safe deposit boxes.

Why This Has People Talking

Some digital assets users and experts have expressed worry about the bill. They feel it goes against the privacy and freedom principles that many in the crypto community value. This concern has led to more people encouraging self-custody — where users keep their currencies in private wallets instead of exchanges.

However, supporters of the bill say those fears are mostly misplaced. Eric Peterson, a policy director at the Bitcoin-focused group Satoshi Action Fund, reassured the public that currencies will not be sold off by the state. Instead, the digital assets will remain in their original form and owners can reclaim them anytime.

“Your Bitcoin stays as Bitcoin,” Peterson explained on social media. “You can get it back from California in Bitcoin.”

Source: Eric Peterson X Handle

Similarly, digital assets lawyer Hailey Lennon noted that unclaimed property laws like this are common across many states. She said exchanges already follow these rules, and owners simply need to contact the state to recover their assets.

AB-1052 in the Bigger Crypto Picture

AB-1052 is one of several recent bills related to cryptocurrency that California lawmakers are considering.On June 2, the California Assembly also passed bill AB-1180. Its purpose is for state administrations to receive payments in digital currency which helps enlarge the range of cryptocurrencies used in public services.

Approval of these bills by both the Senate and Assembly might result in clearer laws for cryptocurrency companies and users there. Making digital currency payment rules would be one of the tasks assigned to the Department of Financial Protection and Innovation under the new laws.

What This Means for Crypto Users 

If AB-1052 becomes law, Californians who hold cryptocurrencies on exchanges should make sure to access their accounts at least once every three years. Doing so will prevent their assets from being temporarily seized by the state.

There is no reason to become too worried. The law tries to keep the digital currency safe while in the hands of owners, not just hand it over to be sold. Still, experts advise using private wallets and keeping your tokens safe by controlling for security.

As the bill moves to the Senate, the users and businesses will be watching closely to see how it might change California’s cryptocurrency landscape.