California Signs AB 1052; SB 822 in Force: Crypto Under Unclaimed-Property Law, No Automatic Liquidation

California signs AB 1052; SB 822 in force: Crypto under Unclaimed-Property Law, no automatic liquidation, 3-year inactivity trigger with pre-escheat notice, in-kind transfer to licensed custodians, and a conversion window of 18–20 months.

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What Is the Impact?

The law sets 3 years without signs of owner interest as the escheat trigger. Signs of interest include account transactions, purchases or sales of digital assets, inflows or outflows of funds, electronic access to the account, and other reasonable actions confirming ownership. The holder sends notice in advance and provides a means to confirm the current address and contact information. The owner responds with the form or contacts through an acceptable channel – the holder records the fact of contact and restarts the 3 years.

Upon escheat, the holder transfers the corresponding digital financial asset and the necessary private keys in their original form, without prior liquidation. If the holder controls only part of the keys or encounters a technical constraint, the holder takes steps to complete the transfer. The State Controller appoints one or more licensed custodians. The selection considers DFPI licensure, mature key-management and information-security procedures, compliance with federal and state requirements, reporting, and readiness for reunification with owners. This arrangement ensures preservation of the asset’s nature and compatibility of custodial platforms’ operating processes with the state custodian.

The Controller considers conversion to fiat only within the 18–20-month window after the holder’s final reporting date. Until that point, the asset remains in its original form. An owner who asserts rights before the sale receives the asset itself; after the sale, receives the net proceeds. This lag reduces the risk of forced price lock-in without the owner’s consent and sets a predictable horizon for state procedures and liquidity planning at custodians.

Paul Grewal, Chief Legal Officer at Coinbase, states:

"Thank you, @GavinNewsom, for signing SB 822, which stops the state from liquidating Californians' unclaimed crypto investments without their consent. Also, thank you @SenJoshBecker, who sponsored the bill. Now it’s time for California to join the 46 other states, along with @secgov, that protect the right to stake with @coinbase and others."

What Is the Practical Benefit for All Parties?

This regulatory framework indeed promises transparency for retail and institutional participants. Custodial platforms set up processes for notices, recording signs of interest, and readiness to transfer assets and keys to the state custodian without changing the nature of the asset. Owners receive a predictable procedure: the asset moves to state custody without a sell-off, retains its properties within the established window, and remains available for in-kind return until conversion. Stay tuned for the latest updates and opportunities in the new economy, crypto industry, and blockchain developments.