California Bill Mandates Custody of Unclaimed Bitcoin After 3 Years of Inactivity, Ensuring Investor Asset Safety

On June 5th, California legislators approved a bill mandating the state to seize unclaimed cryptocurrency assets from exchanges if user accounts remain inactive for three years without any indication of asset engagement. This regulatory move aims to address dormant digital holdings while ensuring asset security. The legislation has ignited considerable discussion within the crypto community, with many investors expressing concerns on social platforms. However, proponents clarify that the state will not liquidate these digital assets. Instead, the assets will be transferred to a trusted third-party custodian, preserving the tokens for future retrieval by rightful owners. This approach safeguards investors’ holdings from unauthorized sales, maintaining market integrity and protecting consumer rights. The bill reflects a growing trend in regulatory frameworks seeking to balance asset protection with investor accessibility in the evolving cryptocurrency landscape.