Arizona's Bitcoin Reserve Dream Crushed Again: Governor Hobbs Vetoes HB 2324

Governor Hobbs Axes Bill for Third Time, Shuts Down Crypto Fund from Criminal Seizures

Hold onto your hats, crypto fans! Arizona's latest shot at setting up a Bitcoin Reserve just got slammed down—again. Yep, Governor Katie Hobbs has vetoed bill HB 2324, which was all about creating a Bitcoin and Digital Assets Reserve Fund bankrolled by seized cryptocurrencies. It's the third time this session the state has given a big "nope" to a digital asset reserve proposal.

In a fiery veto letter shot over to House Speaker Steve Montenegro, Hobbs made it clear: HB 2324 isn't happening. The bill wanted to use cryptocurrencies nabbed through criminal forfeiture to pump up this new fund, but Hobbs wasn't having it.

It's been a rollercoaster, folks. The House first gave HB 2324 the cold shoulder back on May 7. But then, after a nail-biting 16-14 vote in the Senate on June 19—thanks to a last-minute flip by Republican Senator Janae Shamp—the bill roared back to life. It even managed to pass the House again on June 24 with a 34-22 vote. The plan? Hand over the seized digital goodies to the State Treasurer, then divvy them up among the Attorney General’s office, the state’s general fund, and the shiny new reserve fund.

But Hobbs wasn't buying it. In her veto letter, she laid down the law: funneling these assets into a state-managed reserve could totally throw a wrench in local agencies' willingness to jump into investigations and seizures. And that, she said, would be a major buzzkill for cracking down on crimes involving digital assets.

“Today, I vetoed House Bill 2324. This bill disincentives local law enforcement from working with the state on digital asset forfeiture by removing seized assets from local jurisdictions,” she penned, pulling no punches.

Yep, HB 2324's veto marks the third time Hobbs has thrown cold water on a digital asset reserve proposal this session.

Before this, she shot down SB 1025, which was dreaming of letting the state splash up to 10% of public funds into Bitcoin or other digital assets. Then there was SB 1373, another hopeful plan to fund a Digital Assets Strategic Reserve with seized cryptocurrencies and other cash.

But hey, it's not all doom and gloom in the crypto world of Arizona. Hobbs did sign HB 2749 into law on May 7, setting up a reserve for unclaimed digital assets like abandoned cryptocurrencies, airdrops, and staking rewards. This one's managed by the Department of Revenue, and it's a way to weave digital assets into the state's financial fabric without going all in on direct investments or leaning on criminal forfeiture funds.