For years, the ‘HODL’ mantra was simple: buy Bitcoin [BTC]move it to a safe place and forget about it being around for ten years.
But in California, silence is now being codified as surrender, with negotiations underway as early as June 2025.
With the passage of Assembly Bill 1052, introduced by Assembly Member Avelino Valencia, California, the fourth largest economy in the world, has officially included digital assets in the Unclaimed Property Law.
California’s new crypto law
Unlike traditional seizures, the state does not liquidate these coins for cash. Under the new law, California must even appoint a licensed custodian to keep these assets in their original form.
The lawmakers noted:
“California must protect consumer assets and embrace regulatory recognition of digital assets, crypto and blockchain as we continue to modernize our economy and the systems in our society.”
After Assembly member Valencia’s closing call, there was no further debate in the chamber, underscoring a united legislative front on the issue of crypto evasion.
Impact on California’s crypto landscape
That said, the enactment of AB 1052 fundamentally changes the crypto landscape in California by ending the era of regulatory uncertainty for long-term investors.
By officially classifying digital assets as intangible property, California is forcing an ecosystem cleanup.
While this increases institutional legitimacy and lets companies legally accept crypto, it also creates a heavy compliance burden for exchanges.
So now these platforms must implement rigorous notification systems to alert users before the three-year clock runs out.
In short, for most investors, the law acts as a “use it or lose it” rule, encouraging HODLers to self-custody their crypto to avoid state control.
Is California alone?
Needless to say, California isn’t the first state to eye dormant cryptocurrencies, but it does currently offer the most protective asset value.
States like Illinois and Delaware were early in setting rules for dormant cryptocurrencies, but their approach has a major drawback.
They require that any abandoned digital assets be sold for US dollars before the state takes control.
That means if you lost track of your Bitcoin when it was worth $20,000, the state would immediately sell it and you would miss out on future profits.
Arizona followed a similar path with its 2025 law, which establishes a three-year dormancy period and lets the state liquidate assets through approved exchanges.
What’s more?
This turning point comes just as 2026 brings new developments optimism to the crypto market. With the entire market trading in a bullish zone, Bitcoin has finally climbed above the $90,000 mark.
Meanwhile, Ethereum [ETH] at the time of writing, it also passed $3,300 with renewed momentum.
Against this backdrop of rising confidence, the CLARITY Act takes on even greater significance.
Final thoughts
- The three-year inactivity rule forces users to stay active, shifting the traditional HODL mentality to self-control.
- The 69-0 vote marks a rare bipartisan agreement, underscoring the urgency of regulating digital assets.