Arizona to Administer Unclaimed Digital Assets Under New Legal Regulations, Avoiding Liquidation
Arizona's fresh approach to unclaimed digital assets, like crypto, now means the state keeps them in their original form instead of converting them to cash. This change is thanks to House Bill 2749, which Governor Katie Hobbs signed recently, updating Arizona's unclaimed property rules for the digital age.
In this new system, custodians of digital assets will hand them over to the Department of Revenue if there's no activity or contact from the rightful owner for three years. The state will receive these assets as they are, not as cash.
Representative Jeff Weninger, House Commerce Committee chair, champions this move. He reckons Arizona won't leave value untouched and will lead the nation in digital asset management. As Weninger put it, "Arizona won't miss out on value, and we're aiming to be pioneers in safeguarding, managing, and benefiting from abandoned digital currency."
Arizona also plans to establish a reserve account for staking rewards, airdrops, and other connected earnings from these unclaimed assets. Funds from this account can be used with legislative approval later on.
However, a separate crypto bill didn't fare as well. Senator Wendy Rogers' idea to launch a Strategic Bitcoin Reserve from seized state assets was shot down. Governor Hobbs nixed that plan on May 2, warning of potential risk. She explained in her veto letter, "Arizonans' retirement funds aren't the state's playground for unproven investments, like virtual currency."
Senator Rogers isn't giving up yet and aims to revive the proposal in a future session.
Elsewhere, New Hampshire made waves with HB 302, which lets 5% of state funds be invested in either precious metals or digital assets. Governor Kelly Ayotte signed this law, but it includes Bitcoin—as long as the asset boasts an average market cap of at least $500 billion.
Insight: Arizona's approach to unclaimed digital assets is revolutionary. It's the first state to keep digital assets in their native form, with the potential to increase their value through staking and airdrops. The earnings from these activities will be stored in the Arizona Bitcoin & Digital Assets Reserve Fund, not relying on taxpayer money and subject to future legislative approval.*
Sources: * [1] AZ Central * [2] CoinDesk * [3] StateScoop * [4] American City Business Journals * [5] AZ Big Media
- The Department of Revenue in Arizona will receive unclaimed digital assets, such as crypto, from custodians without converting them to cash due to House Bill 2749.
- With this new system, Arizona aims to be a pioneer in managing and safeguarding abandoned digital currencies, following Representative Jeff Weninger's argument that the state won't miss out on value.
- In addition, Arizona is planning to establish a reserve account for staking rewards, airdrops, and other connected earnings from unclaimed digital assets, with funds from this account subject to future legislative approval.
- However, efforts to launch a Strategic Bitcoin Reserve from seized state assets, as proposed by Senator Wendy Rogers, were rejected due to potential risk, as explained by Governor Katie Hobbs in her veto letter.
