Unclaimed property: digital financial assets.

Plain English Breakdown

The exact composition and responsibilities of the Digital Asset Reserve Board are not detailed in the official source.

Unclaimed Property: Digital Financial Assets

This law establishes a new fund for unclaimed digital financial assets, sets rules for converting these assets into high-quality ones after a certain period, and outlines how the state will manage this process.

What This Bill Does

• Creates the Digital Asset Reserve Fund to hold unclaimed digital financial assets.
• Requires the State Controller to convert escheated digital financial assets into high-quality digital assets between 18 and 20 months after reporting by property holders.
• Establishes a Digital Asset Reserve Board to oversee the fund's management and operations.
• Allows the State Controller to hire staking service providers for the fund’s digital assets, with rewards going back into the fund.
• Requires quarterly reports from the State Controller about the fund.

Who It Names or Affects

• People who have unclaimed digital financial assets that escheat to the state.
• Businesses holding digital financial assets that may be subject to escheatment.
• The State Controller and their staff managing the Digital Asset Reserve Fund.

Terms To Know

Digital Financial Assets

Electronic money or tokens, like cryptocurrencies, that have monetary value.

Escheatment

The process by which unclaimed property is transferred to the state after a period of inactivity.

Limits and Unknowns

• It does not specify what happens if someone claims their assets before they are converted.
• Details about how high-quality digital assets will be defined and selected are not provided.
• The exact amount of staking rewards is uncertain as it depends on market conditions.

Official Summary Text

AB 2335, as amended, Valencia.
Unclaimed property: digital financial assets.
The Unclaimed Property Law (UPL) prescribes the circumstances under which intangible property, including digital financial assets, escheats to the state, including how and when apparent owners must be notified that their property is at risk of escheating and the manner in which escheated property must be delivered to the State Controller. Existing law also requires that business associations holding a financial asset that is potentially subject to escheatment provide notice to the owners of that asset as specified.
The bill would create the Digital Asset Reserve Fund into which digital financial assets shall be deposited, as specified. This bill would require the Controller to convert digital financial assets escheated to the state into high-quality digital assets, as specified. The bill would require the notice provided by holders of digital
assets to include a notification that, if escheated, the assets will be put into the Digital Asset Reserve Fund and will be converted into high-quality assets after the requisite holding period, as specified. The bill would create a Digital Asset Reserve Board assigned specified tasks relating to administration of the fund. The bill would authorize the Controller to take specified actions related to digital financial assets and would require the Controller to publish a quarterly report, as specified. The bill would require the Controller’s conversion of digital financial assets escheated to the state into high-quality digital assets to occur not sooner than 18 months, but not later than 20 months, after the date the escheated property is reported to the Controller by the holder of the property. Under the bill, a person who makes a valid claim before the conversion by the Controller is entitled to receive the digital financial assets in their native form or in fiat currency, as specified.
This bill would authorize the Controller to engage qualified staking services providers to stake digital financial assets escheated to the Digital Asset Reserve Fund, as specified. This bill would allocate any staking rewards derived from the staking of digital financial assets to the Digital Asset Reserve Fund as the property of the fund.
This bill would authorize the Controller to use assets within the Digital Asset Reserve Fund to pay for the administration and management of the fund, thereby making an appropriation.

Current Bill Text

Download Bill PDF