California has enacted legislation that expands the state's authority over unclaimed digital assets. Under the new rules, if a Bitcoin or cryptocurrency account remains inactive for three consecutive years, California can classify these holdings as unclaimed property and move to claim them on behalf of the state.

This policy shift brings crypto assets under the same unclaimed property framework that traditionally applied to stocks, bonds, and bank accounts. The mechanism works similar to how dormant accounts are handled in conventional finance—the state acts as custodian for assets with no verified owner activity during the specified window.

For crypto holders, the implications are straightforward: maintaining regular account activity or formally registering assets becomes essential to prevent state seizure. The three-year inactivity threshold essentially forces a choice between active management or potential loss of holdings to state custody programs.

This represents a significant regulatory moment, as it marks one of the first major U.S. state-level frameworks directly treating cryptocurrency through unclaimed property statutes. Other jurisdictions will likely watch how California implements this policy before potentially adopting similar measures.