California shields unclaimed crypto from forced liquidation

California enacted SB 822 updating its Unclaimed Property Law to cover digital assets and bar forced liquidation of unclaimed crypto before transfer to state custody. Current as of 14 Oct 2025. What the law does Holders must remit unclaimed crypto to the State Controller or a designated custodian in kind. Default custody is the native asset, not cash. The Controller can convert later under defined conditions. Qualified custodians must meet security, segregation, and audit standards. Process and timelines Before escheat, holders must attempt owner contact and provide notice within the statutory window. After transfer, owners reclaim the same asset type rather than sale proceeds. Exchanges and custodians face reporting, recordkeeping, and asset-mapping requirements. Market context California is the first state to codify explicit in-kind treatment for unclaimed crypto. The rule reduces involuntary sell pressure during escheat events, clarifies obligations for platforms with dormant accounts, and sets a template other states can adopt or modify.