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California lawmakers recently passed a bill that would allow the state to \u2018seize\u2019 cryptocurrency in traders\u2019 exchange accounts that have remained idle for three years. The new law has sparked debate among worried traders.<\/p>\n
On June 4, the California House passed Assembly Bill 1052 or AB 1052. The bill stipulates<\/a> that if users fail to show \u201cownership interest\u201d towards crypto assets kept in their digital accounts for up to three years, then the state is allowed to seize the crypto kept in the account.<\/p>\n If it passes through the Senate vote, the bill would allow the State of California to seize crypto assets kept in a crypto exchange account that has been dormant for up to three years. Traders can indicate \u201cownership interest\u201d by accessing their account, conducting transactions, depositing or withdrawing funds, and other related activities.<\/p>\n \u201cThe running of the three-year period under paragraph\u2026 ceases immediately upon the exercise of an act of ownership interest in the digital asset account,\u201d read the bill.<\/p>\n However, the bill also added that before seizure, the state will first attempt to contact the account owner through written or electronic communication. If the owner fails to respond, then the \u201cproperty held within a digital asset account escheats to the state three years after.\u201d<\/p>\n <\/p>\n Many traders have expressed concern over the bill, especially long-term Bitcoin (BTC) holders. Bitcoin advocate and author Jason Ai. Williams openly criticized<\/a> the bill, claiming that the bill would rob traders of their Bitcoin if passed.<\/p>\n \u201cBill now heads to the Senate. Hilarious. California always finding ways to rob it\u2019s citizens,\u201d wrote Williams in his post<\/a>.<\/p>\n Other traders have expressed concern over the bill, alleging that it would deter long-term holders. Some have also seen it as a sign to switch to self-custody instead of relying on crypto exchanges.<\/p>\n \u201cSo if you just hold and never sell then they can take it away?\u201d asked one user.<\/p>\n \u201cWow. Just another reason for self custody,\u201d said another user.<\/p>\n Despite the backlash, many have also pointed out that the bill does not necessarily bring as much harm as some traders believe. <\/p>\n Policy Director at Satoshi Act Fund, Eric Peterson claimed many traders have misunderstood AB 1052. He explained that the bill abides to current property laws, which grants state ownership over unclaimed assets and updates it so that crypto assets remain in their original state.<\/p>\n This means that the state is not able to liquidate crypto assets seized from dormant accounts into fiat currency.<\/p>\nMisconceptions surrounding California\u2019s latest crypto bill <\/h2>\n