California’s Unclaimed Cryptography Law Increases Protection for Owners

California Unclaimed Crypto Law This comes into effect under SB 822, which establishes clear rules regarding the treatment of dormant wallets and custodial accounts.

The law protects owners’ rights, establishes notification procedures, limits compulsory liquidation, and clarifies administrative obligations.

California: Subject to the Unclaimed Cryptography Act

Senate Bill 822 (SB 822) explicitly incorporates digital financial assets into California’s unclaimed property law.

The measures aim to define when assets are abandoned, require holders to follow reporting procedures and, importantly, preserve assets in their original form as much as possible. For the full text of the statutory language, please see the text of the SB 822 bill.

How Cryptocurrency Eschement Notification Requirements Work

SB 822 creates concrete Cryptocurrency Escapement Notification Requirements. Owners should attempt to contact the apparent owner using an administrator-approved notification form. The notice must be sent 6 to 12 months before the final report and the responding owner can reinstate the escapement period.

In other words, this law gives owners a real opportunity to recover their property before it passes into state custody.

Notification to owners of escheat periods: timing and format

The law requires documented support activities and specific timing frames. Owners must send at least one attempt to notify owners within 6-12 months and use an administrator-approved template if provided.

Therefore, businesses will need reliable contact records and audit trails to prove compliance.

State administrator crypto custodian and private key transfer

SB 822 is National Administrator Cryptographic Administrator role. The Administrator may select one or more licensed custodians to accept unclaimed digital assets on behalf of the State. Under this law, holders must transfer the exact asset type and unliquidated amount. The law also Private key transfer requirements Allows safe storage.

Transfers must be made within 30 days of the last reporting date.

Requirements for a licensed cryptocurrency custodian

Administrators designated by the Administrator must hold a valid license or authorization in accordance with national supervision. Therefore, the Act introduces clear provisions. Requirements for a licensed cryptocurrency custodian It is intended to protect assets under state control. Businesses must check the license before carrying out the transfer.

Unclaimed Cryptocurrency Conversion Rules and Asset Recovery

Administrators may convert unclaimed cryptocurrencies into fiat currency only after the statutory waiting period has elapsed. Specifically, conversions are allowed within 18 to 20 months from the filing date, and valid claimants can later receive the original assets or sale proceeds. these Unclaimed Cryptocurrency Conversion Rules It aims to balance the owner’s right to recovery with the actual custody needs.

Claiming property after mortgage

The owner may submit a valid claim to the administrator to recover the original property or, if it has already been sold, the net proceeds. Therefore, parties should maintain clear ownership records to speed up recovery.

Practical instructions for exchanges, custodians and owners

From operational experience, companies should coordinate hot and cold wallets and keep complete contact and KYC records. In addition, we will document all attempts to notify the owner and retain proof of delivery for controller inspection. Finally, create a multi-signature transfer plan to reduce single-point custody risks when transferring assets to a state-appointed custodian.

• Prepare the recording. Maintain evidence of outreach and ownership.
• Check your license. Verify that the designated custodian meets state requirements.
• Planned custody: Transfers use multisig or agency control.

As a practical matter, these steps can help reduce operational risks and avoid conflicts. Additionally, an independent custody audit and pre-transfer reconciliation is recommended to prevent delays.

Administrator Maria Cohen emphasized the policy intent behind SB 822, calling the measure “another important step toward modernizing California’s regulatory framework to reflect the realities of digital financial assets.” Please contact the California Department of Administration for official guidance and ongoing updates.

For more analysis and regulatory tracking, read Cryptonomist’s article on cryptocurrency regulation. Companies affected by this law should review their internal compliance policies and consult legal counsel before transferring assets to a custodian.