Arizona Law Allows State to Claim Abandoned Crypto Assets After Three Years

TLDR Arizona Governor Katie Hobbs signed HB 2749, allowing the state to claim abandoned crypto assets after three years Arizona will keep digital assets in their native form rather than converting to cash Hobbs vetoed a separate bill (SB 1025) that would have permitted investing public funds in Bitcoin The new law allows for staking and airdrops with proceeds going to a Bitcoin Reserve Fund Arizona becomes the second US state after New Hampshire to establish crypto legislation Arizona has taken a groundbreaking step in cryptocurrency policy by signing a law that allows the state to claim ownership of abandoned digital assets. On May 7, 2025, Governor Katie Hobbs signed House Bill 2749 into law, making Arizona the second state after New Hampshire to pass crypto legislation. The new law considers digital assets abandoned if owners do not respond to communications over a three-year period. Once classified as abandoned, these assets must be delivered to the Arizona Department of Revenue in their original form. What makes this law unique is that Arizona will become the first state to retain digital assets without converting them to cash. This approach preserves the potential value growth of these assets while they remain in state custody. House Commerce Committee Chairman Jeff Weninger led the bipartisan effort. “This law ensures Arizona doesn’t leave value sitting on the table and puts us in a position to lead the country in how we secure, manage, and benefit from abandoned digital currency,” Weninger stated. How the Reserve Fund Works The law permits qualified custodians to stake the acquired assets or accept airdrops. All proceeds will be placed into a newly created Bitcoin and Digital Assets Reserve Fund, which will be managed by the State Treasurer. This structure secures the value of unclaimed digital property while opening financial channels for state use. The fund will operate without introducing new taxes or expanding government size, as it relies entirely on unclaimed assets. The law has been designed to protect property rights while giving the state tools to account for digital assets in the economy. This balanced approach helped the bill gain support across party lines. Separate Bitcoin Investment Bill Rejected While embracing unclaimed crypto assets, Governor Hobbs took a more cautious approach to direct investment. Shortly before signing HB 2749, she vetoed Senate Bill 1025, which would have allowed Arizona to allocate up to 10% of its treasury and pension funds to Bitcoin and similar digital assets. In her veto message, Hobbs explained that Arizona’s retirement system remains stable because it relies on tested investment strategies. She emphasized that digital assets do not currently meet those standards. This decision places Arizona in contrast with New Hampshire, which recently passed House Bill 302. The New Hampshire law authorizes their state treasury to hold a limited portion of reserves in cryptocurrencies with market capitalization exceeding $500 billion. Currently, only Bitcoin qualifies under this threshold. Despite the veto, crypto advocates see hope in Hobbs signing HB 2749. Julian Fahrer of Bitcoin Laws suggested this might bode well for Senate Bill 1373, which is currently on Hobbs’ desk. This bill would authorize Arizona’s treasurer to allocate up to 10% of the state’s Budget Stabilization Fund into Bitcoin. Arizona Update: HB 2749 has been signed into law, technically creating AZ’s first crypto reserve. It doesn’t allow investment, but moves unclaimed assets, airdrops, and staking rewards into a reserve. IMPORTANT: Shows Gov. Hobbs is willing to enact pro-crypto legislation pic.twitter.com/BeTRdD8GlD — Bitcoin Laws (@Bitcoin_Laws) May 8, 2025 The move has received praise from industry leaders. Bitwise CEO Hunter Horsley commented, “Second state in two weeks. Not a fickle decision. A law. Bitcoin is entering the mainstream.” Former Binance CEO Changpeng Zhao added, “You can buy while governments are buying or after they have bought.” With this legislation, Arizona joins a growing number of states exploring different approaches to cryptocurrency regulation and adoption. While Florida has withdrawn similar initiatives, North Carolina continues to pursue comparable efforts. Source: https://blockonomi.com/arizona-law-allows-state-to-claim-abandoned-crypto-assets-after-three-years/