California’s SB 822 May Protect Unclaimed Bitcoin by Requiring Crypto Stay in Native Form

• SB 822 prevents forced liquidation of unclaimed crypto and mandates transfer of the exact asset type and keys.

• Holders must notify apparent owners 6–12 months before reporting and transfer assets to licensed custodians within 30 days of reporting.

• Controller may convert unclaimed crypto to fiat 18–20 months after filing; valid claimants receive either assets or proceeds.

Unclaimed crypto: California’s SB 822 protects dormant digital assets from forced liquidation, preserves private keys, and sets clear escheatment rules—learn how to reclaim assets.

What is California’s unclaimed crypto law?

California’s unclaimed crypto law, enacted as Senate Bill 822, extends the state’s Unclaimed Property Law to digital financial assets. The statute treats Bitcoin, Ethereum, and other crypto as intangible property, requires owner notification, and mandates transfer of unliquidated assets and private keys to a licensed custodian rather than forced conversion to cash.

How does SB 822 protect owners and industry operations?

SB 822 clarifies duties for exchanges, custodians, and wallet providers to avoid creating involuntary taxable events caused by forced liquidation. The bill requires notification of apparent owners six to 12 months before reporting and provides a Controller-approved form that can restart the escheatment clock. Holders must transfer the exact asset type, corresponding private keys, and precise amounts to the Controller’s selected, licensed crypto custodians within 30 days after final reporting. The Controller may convert assets to fiat only 18 to 20 months after filing, ensuring a lengthy window for claimants to recover property.

Frequently Asked Questions

How long before a dormant crypto account is considered unclaimed under SB 822?

Under the updated framework, digital financial assets are subject to the same dormancy principles as other intangible property. Dormancy is typically determined after three years of inactivity following failed contact attempts or owner outreach, consistent with California’s existing Unclaimed Property Law procedures.

Will I lose my crypto if it’s reported as unclaimed?

No. SB 822 requires holders to transfer unliquidated assets and the associated private keys to licensed custodians so claimants can recover their original digital assets. If the Controller later sells assets, valid claimants are entitled to either the original asset or the sale proceeds.

Who enforces the new rules and which custodians can hold state-held crypto?

The California State Controller’s Office is authorized to select one or more licensed custodians for escrow and safekeeping. These custodians must hold valid licenses issued by the Department of Financial Protection and Innovation and meet any standards set by the Controller for secure custody and management.

Background and implications

The bill, authored by Senator Josh Becker (D–Menlo Park), passed both legislative chambers unanimously in September and was signed by Governor Gavin Newsom. It resolves prior uncertainty about whether unclaimed crypto should be treated as cash-equivalent or as intangible property. Industry groups including the California Blockchain Advocacy Coalition (CBAC) advocated for protections that prevent forced liquidation. Joe Ciccolo, Executive Director of CBAC, said SB 822 “provides long-awaited clarity by extending the existing UPL framework to digital financial assets, ensuring they’re handled consistently and responsibly.”

By preserving assets in their native form and requiring transfer of private keys, the law reduces potential tax consequences for owners and simplifies compliance for custodians and exchanges. Practical effects include updated operational workflows for customer notifications, reporting, and secure transfers to state-selected custodians. The new rules also give the Controller a defined timeline for conversion to fiat, balancing claimant rights with state asset management responsibilities.

Key Takeaways

• Protection for owners: SB 822 prevents forced liquidation, ensuring owners’ digital assets remain unliquidated and recoverable.
• Clear procedures: Holders must notify owners 6–12 months before reporting and transfer assets and private keys within 30 days of reporting.
• State custody rules: The Controller will use licensed custodians; conversion to fiat is permitted only 18–20 months after filing and claimants are entitled to assets or proceeds.

Conclusion

California’s SB 822 modernizes the Unclaimed Property Law by explicitly treating digital financial assets as intangible property and protecting unclaimed crypto from automatic liquidation. The law sets clear timelines for notification, transfer, and potential conversion, while authorizing the Controller to work with licensed custodians to safeguard assets. Sources consulted for this report include statements from Governor Gavin Newsom’s office, Senator Josh Becker’s legislative summary, the California State Controller’s Office, the Department of Financial Protection and Innovation, and public comments from the California Blockchain Advocacy Coalition. COINOTAG reports and will continue to monitor implementation and claimant guidance as agencies publish regulations and forms. Published: October 14, 2025. Updated: October 14, 2025.

Author: COINOTAG

Sources (plain text): Governor Gavin Newsom; Senator Josh Becker; California State Controller’s Office; Department of Financial Protection and Innovation; California Blockchain Advocacy Coalition; Joe Ciccolo (Executive Director, CBAC).