California’s Governor recently approved a law to include crypto assets in the state’s Unclaimed Property Law (UPL) to preserve unclaimed digital assets in their original form and prevent automatic liquidation or cash conversions.
California Governor Gavin Newsom signed Senate Bill 822 (SB822) into law on Saturday to update the Code of Civil Procedure to clarify that crypto assets are intangible property that are subject to the unclaimed property law.
The bill, sponsored by Senator Josh Becker, passed both chambers in September and was sent to the Governor’s desk by the end of the month, according to California’s legislative information website.
This move follows California lawmakers’ previous efforts to develop a comprehensive framework for crypto assets. In February, California’s Banking and Finance Committee chairman, Avelino Valencia, introduced Assembly Bill 1052 (AB1052) to secure self-custody rights for the state’s residents.
Unclaimed Property Law provides that all intangible personal property of an apparent owner “escheats to the state if, for more than 3 years after it becomes payable or distributable, the apparent owner has not taken specified actions showing an interest in or control of the property.”
Therefore, updating the UPL to include crypto assets would provide that “intangible property held in a digital asset account escheats to the state 3 years after either written or electronic communication to the owner is returned undelivered, or the date of the last exercise of ownership interest, as defined by the owner.”
It also prescribes requirements for holders of the unclaimed crypto assets to notify apparent owners prior to the assets escheating, and it authorizes the State Controller to select one or more custodians for the management and safekeeping of unclaimed digital assets that have escheated to the state.
All escheated property delivered to the Controller under this chapter shall be sold by the Controller to the highest bidder at public sale in whatever city in the state affords in the Controller’s judgment the most favorable market for the property involved, (…). However, no sale shall be made pursuant to this subdivision until 18 months after the final date for filing the report required by Section 1530.
Nonetheless, Grewal urged the state authority to “join the 46 other states, along with SEC that protect the right to stake with Coinbase and others,” hinting that legislative efforts must continue.
