California's Shocking New Bill: State Can Seize Your Crypto After 3 Years of Inactivity!

Holy smokes, California just dropped a bombshell! They've passed a bill that lets the state swoop in and grab your crypto if it's just sitting in your exchange account for three years. Traders are freaking out over this one.

On June 4, the California House gave the green light to Assembly Bill 1052, or AB 1052. This wild bill says that if you don't show any "ownership interest" in your crypto for three whole years, the state can just take it. Can you believe that?

If this thing gets through the Senate, California can start snatching up those dormant crypto accounts. But hey, you can keep them safe by just logging in, moving some coins around, or making a deposit or withdrawal. Simple, right?

"The running of the three-year period under paragraph... ceases immediately upon the exercise of an act of ownership interest in the digital asset account," the bill declares. In other words, do something with your account, and the clock resets!

But hold up, the state isn't going to just steal your crypto without a warning. They'll try to reach out to you first, through letters or emails. If you don't respond, then bam, your assets "escheat" to the state after three years.

Traders are losing their minds over this, especially those holding onto their Bitcoin for the long haul. Jason Ai. Williams, a big Bitcoin advocate and author, blasted the bill, saying it's just another way for California to rob its citizens.

"Bill now heads to the Senate. Hilarious. California always finding ways to rob it's citizens," Williams posted, clearly fuming.

Other traders are worried this could scare off long-term holders and push more people towards self-custody solutions instead of trusting exchanges.

"So if you just hold and never sell then they can take it away?" one user asked, totally shocked.

"Wow. Just another reason for self custody," another chimed in, echoing the sentiment.

Misconceptions Surrounding California's Latest Crypto Bill

Despite all the uproar, some folks are saying the bill isn't as bad as it sounds. Maybe it's not the crypto apocalypse after all.

Eric Peterson, Policy Director at Satoshi Act Fund, jumped in to set the record straight. He said a lot of traders are getting AB 1052 all wrong. The bill just updates the old property laws to include crypto, and it makes sure that if the state does take your assets, they stay in their original form.

So, no, the state can't just turn your crypto into cash and pocket it.

"This is incredibly incorrect. What it does is update the unclaimed property laws so when your #Bitcoin is turned over as unclaimed property from an exchange, it stays in the form of Bitcoin rather than being liquidated. You can then get it back from California in Bitcoin," Peterson explained, setting the facts straight.

And yeah, you can totally get your Bitcoin back from California if it comes to that.

Just to jog your memory, California lawmakers already approved another bill letting the state accept crypto payments. Assembly Bill 1180 kicked off a pilot program running until Jan. 1, 2031, with full rollout planned for July 1, 2026. Seems like California is really getting into the crypto game, one way or another!