An act to amend Sections 1501, 1516.5, 1532, and 1563 of, and to add Sections 1563.5 and 1564.6 to, the Code of Civil Procedure, relating to unclaimed property, and making an appropriation therefor.
AB 2335 would expand California’s Unclaimed Property Law to expressly cover digital financial assets, such as cryptocurrency and other blockchain-based holdings, when they are unclaimed for more than three years. The bill requires holders of these assets to send enhanced notice to apparent owners, including notice that the assets may be transferred to the state, placed in a new Digital Asset Reserve Fund, and potentially staked while held by the state. It also clarifies what counts as owner activity for restarting the escheat period, including transactions, electronic access, and other actions showing continued interest in the account.
Once digital financial assets escheat to the state, the Controller would deposit them into the Digital Asset Reserve Fund and, after an 18- to 20-month holding period, convert them into “high-quality digital assets” as defined by market capitalization. The bill creates a Digital Asset Reserve Fund Board to set valuation, investment, staking, and risk-management policies, and authorizes the Controller to hire qualified staking service providers, earn staking rewards, and use those rewards to purchase additional high-quality digital assets. The bill also requires quarterly public reporting on fund holdings, staking activity, rewards, and any slashing losses, and allows the Controller to use fund assets to cover administrative costs, which makes the bill an appropriation.
The bill would amend the Code of Civil Procedure sections governing unclaimed property to add a detailed framework for digital financial assets, including new definitions, notice requirements, escheat timing rules, fund management provisions, and claim procedures. It would create the Digital Asset Reserve Fund and the Digital Asset Reserve Fund Board, authorize staking and conversion of escheated digital assets, and require the Controller to manage and report on those assets under new statutory duties. The measure would affect holders of digital asset accounts, the State Controller, the State Treasurer, the Department of Finance, and claimants seeking return of escheated digital property.
The available voting history suggests broad support in committee, with unanimous votes of 12-0 and 9-0 on earlier referrals and no recorded opposition in the provided materials. The bill appears to have been treated as a technical and policy update to modernize unclaimed property law for digital assets, while also adding a state-managed investment and staking structure. Its movement to the Senate Appropriations Committee indicates that fiscal and administrative issues are part of the review, but the recorded votes show no visible partisan or procedural resistance at those stages.
The main points of potential contention are the state’s authority to stake escheated digital assets, the risk of slashing or other protocol losses, and whether the Controller should be investing or converting property that may later be claimed by owners. Another likely issue is the complexity of returning assets in native form versus fiat currency after conversion, especially if assets are staked and must be unstaked before release. There may also be concern about the bill’s appropriation and the creation of a new board and reporting regime, though the provided vote record does not show active opposition.