California to Seize Idle Bitcoin After 3 Years?

The state recently passed legislation allowing it to seize Bitcoin and other digital assets. This applies to those left untouched on centralized exchanges for three years.

The move expands California’s “Unclaimed Property” laws into the world of crypto. These laws, which already apply to bank accounts, stocks, and safe deposit boxes, will now also cover Bitcoin.

California Targets Idle Bitcoin for Seizure

While the law is meant to protect lost or forgotten assets, critics say it could catch some investors off guard. Many long-term holders, or “HODLers,” store crypto on exchanges without frequent access, potentially risking forfeiture under the new rules. If Bitcoin remains idle on a custodial platform for more than three years and the owner is unreachable, the state could step in and take control.

The bill gives the California State Controller’s Office the authority to claim digital assets deemed “abandoned.” Under the updated policy, crypto left untouched in an exchange account without communication from the owner could be flagged as unclaimed. Once reported by the exchange, the state would take possession and hold the assets in a government-managed account.

California’s move follows a wider trend of governments looking to regulate digital assets more tightly. Unclaimed property laws have long been used to reunite people with forgotten funds, but the addition of crypto marks a new chapter. According to the National Association of Unclaimed Property Administrators, states currently hold over $70 billion in unclaimed property across the United States. California accounts for a sizable portion of that amount. However, some sources say that this law is different.

AB 1052 Doesn’t Seize Your Bitcoin — It Safeguards It

California’s AB 1052 does not mean the government will seize your Bitcoin outright. The law applies existing unclaimed property rules to crypto held in inactive exchange accounts. If your account sits untouched for over three years and the platform cannot reach you, the exchange may report it to the state.

At that point, the state holds your Bitcoin, not sells it—and you can still reclaim it at any time. Your Bitcoin remains yours, just temporarily safeguarded under state custody until claimed.

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