Crypto or Cash? California’s New Law Draws the Line

California's Senate Bill 822 (SB 822), signed in October 2025, makes the state the first in the US to safeguard unclaimed cryptocurrency from immediate forced liquidation by requiring custodians to transfer assets in their native form under the Unclaimed Property Law. This prevents unintended taxable events for holders. The law classifies digital assets as intangible property abandoned after three years of inactivity, excluding items like loyalty points. Before reporting, holders must notify owners six to 12 months in advance. Once transferred to a state-appointed custodian, claimants can recover the original crypto or its proceeds later, as claims generally have no statute of limitations once assets are in state custody. While other states like Arizona and Texas also incorporate crypto into unclaimed property laws, California's key distinction is its explicit prohibition on forced liquidation upon transfer, prioritizing consumer protection over immediate conversion to fiat.

(Source：Cointelegraph)