CoinPaprika
Oct 14, 2025
7 0

California Shields Unclaimed Crypto from Forced Liquidation

California has updated its Unclaimed Property Law (SB 822) as of October 14, 2025, to include digital assets and prevent the forced liquidation of unclaimed cryptocurrencies before they are transferred to state custody.

Key Aspects of the Law

  • Unclaimed cryptocurrencies must be remitted in kind to the State Controller or a designated custodian.
  • The default custody is the native asset itself, not converted to cash. Conversion can occur later under specific conditions.
  • Qualified custodians must adhere to security, segregation, and audit requirements.

Process and Timelines

  • Holders must attempt to contact owners and provide notice within a statutory timeframe before escheatment.
  • Owners reclaim the original asset type after transfer, instead of receiving sale proceeds.
  • Exchanges and custodians have obligations for reporting, recordkeeping, and asset mapping.

Market Context

  • California is the first state to enforce in-kind treatment for unclaimed cryptocurrencies explicitly.
  • This reduces involuntary sell pressure during escheat events and clarifies obligations for platforms with dormant accounts.
  • The regulation serves as a potential model for adoption or modification by other states.