California passes 'Dormant Virtual Asset Preservation Act'…state barred from forced liquidation

The U.S. state of California has officially passed a bill that requires dormant virtual assets (cryptocurrencies) that have not been withdrawn for more than 3 years to be preserved in their original form instead of being forcibly sold. This is the first legislation to incorporate digital assets into the existing property law framework and is seen as a measure that clarifies asset protection standards at the state level.

On the 14th (local time), according to The Block, California Governor Gavin Newsom signed 'Senate Bill 822 (SB 822)' and 'Assembly Bill 1052 (AB 1052)' the previous day. The law includes digital financial assets such as cryptocurrencies within the long-term dormant property law. It applies to virtual assets that have remained dormant for more than 3 years at custodians such as exchanges.

Accordingly, the state must not cash out dormant virtual assets like Bitcoin (BTC) and Ethereum (ETH) and must securely hold them through designated custodians (qualified custodian). However, if the owner remains unreported for 18–20 months or more, the assets may be sold and converted into fiat currency.

Paul Grewal, chief legal officer of Coinbase, said, "I am grateful that Governor Newsom has prevented the liquidation of Californians' crypto without consent," and added, "Now California also has a legal framework protecting staking rights alongside 46 states and the SEC."