How California’s SB 822 will impact digital assets
California’s Senate Bill 822 (SB 822), signed into law by Governor Gavin Newsom in October 2025, makes California the first US state to protect unclaimed crypto assets from forced liquidation.
Treating digital assets similarly to bank accounts and securities, SB 822 requires unclaimed cryptocurrencies to be transferred in their native form rather than immediately liquidated. This helps prevent forced liquidation of assets like Bitcoin (BTC) or Ether (ETH), which could otherwise trigger taxable events for holders without their consent.
SB 822 has reshaped the legal treatment of digital assets by bringing them under California’s Unclaimed Property Law, the first state framework to clearly include crypto in rules around holding and transferring unclaimed property. Under this law, account holders can reclaim their original digital assets or, if those assets were sold, the net proceeds from the sale by submitting a valid claim to the State Controller.
Authored by Senator Josh Becker, SB 822 updates California’s decades-old Unclaimed Property Law. It passed through both houses in September 2025 before being signed by Governor Gavin Newsom.
Did you know? Self-custodied wallets are generally outside the scope of unclaimed-property laws because no third-party “holder” exists. However, that doesn’t make them risk-free for users. Lost keys, forgotten seed phrases or the death of an owner without an inheritance plan can permanently strand digital assets.
What is unclaimed property, and why does crypto pose a challenge?
Unclaimed property, or escheatment, refers to financial assets that remain inactive or abandoned by their rightful owners for a set period, typically three years. After this period, the state takes over the property. Conventionally, dormant bank accounts, uncashed checks or forgotten securities came under the purview of escheatment.
Applying unclaimed-property laws to cryptocurrency posed significant challenges for regulators. The decentralized nature of crypto raised questions about whether it should be classified as cash, property or a…
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