California lawmakers passed a bill Wednesday allowing the authorities to take control of cryptocurrency from exchanges after three years of inactivity under the Unclaimed Property Law.
What happened: The bill, which proposes to regulate digital asset financial activities, states that “intangible property” held in a cryptocurrency account will become state property if the holder fails to complete an “act of ownership interest” within three years.
These acts include making a transaction, i.e., buying, selling, depositing or withdrawing, and accessing the account electronically, among others.
The draft legislation passed the Assembly and will now proceed to the California Senate.
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The development riled up the cryptocurrency community, with several X users deeming it a seizure of Bitcoin BTC/USD by the state.
However, Dennis Porter, co-founder of Bitcoin advocacy group Satoshi Action Fund, dismissed these interpretations as inaccurate.
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“All state have unclaimed property laws similar to this. What California did was say “any lost bitcoin we hold for users will be kept in bitcoin instead of liquidated to cash,” Porter stated. “They don’t keep it for themselves.”
Why It Matters: The debate over the bill follows the passing of a bill in the California Assembly, which would allow state departments to take Bitcoin under the Digital Financial Assets Law.
An expert that Benzinga talked to earlier said that seizing an individual’s cryptocurrency, like Bitcoin, would be a “logistically and legally complex operation” given its decentralized nature.
Price Action: At the time of writing, BTC was exchanging hands at $104,690.58, down 0.75% in the last 24 hours, according to data from Benzinga Pro.
Photo Courtesy: PalSand on Shutterstock.com
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