On October 11, 2025, California Governor Gavin Newsom signed Senate Bill 822, ushering in a first-of-its-kind protection for digital assets under the state’s Unclaimed Property Law (UPL).

Authored by Senator Josh Becker, this bipartisan bill modernizes California’s decades-old property statutes to include cryptocurrencies like Bitcoin and Ethereum, ensuring they receive the same treatment as unclaimed bank accounts or securities but with rules tailored for the digital age.

 What SB 822 Does

Under previous law, custodians such as crypto exchanges faced uncertainty over how to handle dormant or abandoned crypto assets. Some interpretations could have required liquidation converting digital tokens into cash, before transferring value to the state.

SB 822 changes that approach entirely:

• No forced liquidation: Exchanges and custodians are now prohibited from converting unclaimed digital assets into fiat currency without the owner’s consent.

• Transfer in kind: Dormant assets including private keys, must be transferred unliquidated to a state-approved custodian.

• Advance notice required: Companies must notify owners 6–12 months before any escheatment process begins.

• Conversion timeline: The state may only convert the assets to fiat after 18–20 months, ensuring owners have ample opportunity to reclaim them.

This framework brings regulatory clarity to exchanges while safeguarding consumers from unintended tax consequences and loss of value due to premature liquidation.

Why It Matters

SB 822 positions California at the forefront of digital-asset consumer protection and may well serve as a model for other states.

By acknowledging cryptocurrencies as a unique form of property distinct from traditional securities or cash the bill reinforces the need for technology-responsive legislation that adapts without stifling innovation.

It also strengthens trust in the digital-asset ecosystem by setting clear expectations for how unclaimed crypto should be treated, aligning custodial obligations with 21st-century realities.

A Step Toward Modernized Crypto Governance

California’s move arrives amid broader U.S. efforts to define the boundaries of digital-asset regulation. With federal frameworks still developing, state-level leadership like SB 822 fills critical gaps in consumer protection and compliance guidance.

As the line between traditional finance and Web3 continues to blur, SB 822 signals an important truth: digital assets deserve legal treatment as robust and thoughtful as the technology behind them.

Read the full text of SB 822 here.