- A critical trend has resurfaced online about California’s SB822, legislation that added crypto assets to the state’s unclaimed property framework and provided a system to inform asset owners to claim their assets within a given timeframe or have them transferred to the state
- Many critics claim the move was a desperate attempt by the state to siphon off more funds from residents, since they have only a fixed allocation from the Federal Reserve Bank.
Critics Decry Law as Unfair and Unconstitutional
In October, 2025, California made a pioneering move by becoming the first state to pass legislation that prevents the state’s Comptroller of the Currency from auctioning its residents’ crypto assets without properly notifying them to claim. While many saw it as a massive success in advancing the legitimacy of cryptocurrency and protecting consumer rights, a new group of critics calls it out as a retrogressive and anti-crypto effort.
Per the legislation, digital assets within the custody of exchanges and other such custodians are liable to be claimed by the state if the “apparent owner” does not claim it three years from the date they last indicated interest in the asset.
Others called it “criminal” and unconstitutional, citing how unfair it is to the average Californian to have their savings escheated to the state over inactivity within just three years.
ADVERTISEMENT## Viral Post Sparks Confusion Over Already-Enacted Crypto Legislation
Most of the backlash against the unclaimed properties legislation appears to stem from a controversial post, in which the poster, a reputable industry voice, assumed that the bill had just passed the House and was on its way to the Senate. The only bill that accorded the state the right to claim crypto assets was enacted in 2025.
Additionally, the state does not outrightly seize dormant assets after the 3-year deadline. If it first reaches out to the owners via exchanges between six and twelve months before the asset becomes reportable to the Controller as unclaimed.
Owners who fill out and sign an attached form will be considered active and have their escheating period recycled, while those who fail to respond to their exchanges’ messages will have their funds reported as dormant.
ADVERTISEMENTEven when funds have been transferred to the state, they are held in custody for the rightful owner, not permanently confiscated. A valid proof of ownership would directly earn back the heir’s crypto if it’s still held in its original form.
If the state has already converted the crypto to cash—which is possible within 18 to 20 months—the rightful owner receives the cash equivalent. In both cases, the owner is entitled to any interest on their funds.
ADVERTISEMENT
Disclaimer: The information on this page may come from third parties and does not represent the views or opinions of Gate. The content displayed on this page is for reference only and does not constitute any financial, investment, or legal advice. Gate does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from the use of this information. Virtual asset investments carry high risks and are subject to significant price volatility. You may lose all of your invested principal. Please fully understand the relevant risks and make prudent decisions based on your own financial situation and risk tolerance. For details, please refer to
Disclaimer.
Related Articles
Declare Your Crypto or Face Jail: South Africa’s Aggressive New Capital Flow Rules
South Africa’s proposed capital flow management regulations 2026 introduce strict new requirements for travelers entering or leaving South Africa with cryptocurrency.
Key Takeaways
South African Treasury draft rules require visitors to declare crypto or face up to 5 years in prison.
New 2026 cap
Coinpedia16m ago
U.S. OCC Sets Draft Framework for Stablecoin Issuers Under GENIUS Act Framework
OCC draft sets federal rules for stablecoin issuers and custody services, focusing on safety and regulatory compliance.
Proposal excludes AML and sanctions rules, leaving those areas for separate coordination with Treasury agencies.
Framework marks initial step in multi-agency
CryptoFrontNews2h ago
Tether freezes $344 million in USDT on the Tron network: OFAC collaboration, two addresses implicated in sanctions evasion
According to a Decrypt 4/23 report, stablecoin issuer Tether froze two wallets on the Tron chain that day, totaling $344 million USDT—one of the largest single-instance freezing actions in Tether’s history. The entity coordinating the action did so in conjunction with the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) and U.S. law enforcement agencies. The two addresses were marked as allegedly involved in sanctions evasion, criminal networks, or other illegal activities.
Two Tron addresses total $344 million USDT frozen
Decrypt cites Tether data, saying that this freeze was concentrated on the Tron network, broken down into the following two transactions:
Address (prefix) Frozen amount Chain TNiq9…QZH81 About $213 million USDT Tron
ChainNewsAbmedia2h ago
JPMorgan: DeFi hackers are increasingly common, and interest in compression mechanisms to address TVL stagnation is drawing capital into USDT
JPMorgan Chase’s report believes that DeFi continues to face ongoing vulnerabilities, cross-chain bridge and oracle attacks are frequent, causing TVL to stagnate and weakening institutional investors’ willingness to invest, with capital shifting to USDT that is traceable and can be frozen. The KelpDAO and Rhea Finance attacks reveal risk-management risks; centralized stablecoins and custodial solutions are more favored. In the long run, improving this will require going beyond insurance and governance. DeFi will not be able to return to the 2021 era of high TVL, and stablecoins will become even more concentrated.
ChainNewsAbmedia2h ago
BIS Report Warns Crypto Exchanges Becoming 'Shadow Banks' with Uninsured User Risk
Gate News message, April 23 — The Bank for International Settlements (BIS) released a report warning that crypto exchanges are increasingly providing bank-like services, including lending and yield products (Earn), but lack the regulatory oversight and deposit protections inherent in traditional
GateNews3h ago
Tether Freezes $344M in USDT on Tron Blockchain in Coordination with OFAC
Gate News message, April 23 — Tether froze two large whale wallets on the Tron blockchain holding a combined $344 million in USDT on Wednesday in coordination with the U.S. Treasury's Office of Foreign Assets Control (OFAC) and U.S. law enforcement. The two addresses held approximately $131.3 millio
GateNews4h ago
