Michaela
California Governor Gavin Newsom has signed Senate Bill 822 into law, ensuring that unclaimed crypto holdings held under the state’s Unclaimed Property Law (UPL) will no longer be automatically converted into cash when transferred to state custody.
Key points:
- California leads the way as the first U.S. state to pass a law protecting unclaimed crypto holdings from forced liquidation under its Unclaimed Property Law.
- New safeguards ensure that inactive digital assets are preserved in their original form, with licensed custodians managing storage and owners retaining the right to reclaim them.
- The move marks a shift toward recognizing crypto as legitimate property, bridging traditional finance with decentralization and setting a model for future U.S. regulations.
California has set a national precedent by enacting legislation to protect unclaimed digital assets. The new law, introduced by Senator Josh Becker and approved by Governor Newsom, ensures that cryptocurrencies transferred to state custody are preserved in their original form rather than being liquidated. It marks a major update to California’s long-standing Unclaimed Property Law, which traditionally covered inactive accounts, forgotten investments, and unclaimed insurance payouts.
The new law classifies digital financial assets as a form of intangible property covered by California’s UPL. Cryptocurrency holdings left inactive for three years after failed contact attempts will fall under state custody. Once the escheatment process begins, holders are required to transfer the same type and amount of digital asset, along with its private keys, to a licensed custodian approved by the state within 30 days.
These custodians must be authorized by the Department of Financial Protection and Innovation. After 18 to 20 months, the State Controller may convert unclaimed crypto into fiat currency, though original owners retain the right to reclaim their assets or the equivalent proceeds from the sale.
Safeguarding Crypto Holdings: California Bridges Finance and the Future
This move not only modernizes California’s financial laws but also signals a broader shift in how governments view digital ownership. For crypto investors, it offers a sense of security that their crypto holdings won’t be forcibly liquidated or devalued by outdated regulations.
It also sets a framework for other states to follow, potentially shaping nationwide standards for digital asset custody. For holders of community-driven tokens like SHIB, the measure spotlights growing recognition of decentralized value systems in mainstream policy.
By embedding crypto within the same legal protections as stocks or savings, California effectively bridges traditional finance with the decentralized future, validating the long-term legitimacy of blockchain-based wealth.
As cryptocurrencies continue to blur the line between technology and finance, the state’s proactive approach suggests that regulation doesn’t always have to stifle innovation, it can also protect it. The message is clear: crypto isn’t just a speculative tool anymore. It’s part of the financial fabric, and it deserves to be treated that way.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
