Unclaimed property: digital financial assets.

Senator Becker's digital assets legislation modernizes California's Unclaimed Property Law by establishing procedures for cryptocurrency and other digital financial assets to escheat to the state. The bill creates specific requirements for how businesses must notify owners before digital assets can be deemed abandoned and transferred to state custody.

Under the new provisions, digital financial assets become eligible for escheatment after three years of owner inactivity. Before transferring assets to the state, holders must attempt to contact apparent owners through certified mail or electronic communications if they have consented to digital notices. The notification must explain that the assets risk escheating and provide a form allowing owners to confirm their current information and restart the escheatment period.

The legislation authorizes the State Controller to select licensed custodians to manage and safeguard escheated digital assets. Custodians must demonstrate robust security measures, experience handling digital assets, and compliance with federal and state regulations. The Controller may convert digital assets to traditional currency between 18 and 20 months after receiving them. Owners who later claim their escheated digital assets can receive either the assets themselves or the proceeds from their conversion.

The bill also clarifies that an owner's last known address need not be complete to establish state jurisdiction, as long as it identifies the location as within California. Additional provisions detail what constitutes owner activity that prevents escheatment, including conducting transactions, accessing accounts electronically, or demonstrating knowledge of the assets' existence through other documented interactions with the holder.