🚨 California Wants Your Dormant Bitcoin — Unless You Hold Your Own Keys

“Not your keys, not your coins” isn’t just a meme. It’s your last line of defense.

Earlier this month, the California State Assembly unanimously passed AB 1052, a bill that quietly lays the foundation for the state to take custody of dormant cryptocurrency accounts held on centralized platforms. Under the guise of updating unclaimed property laws, lawmakers have moved to treat inactivity in exchange accounts the same way they treat dusty savings accounts or forgotten stock portfolios.

If you haven’t logged in, withdrawn, or otherwise proven ownership over your exchange-held Bitcoin or other crypto in three years, the state could step in and claim it — in-kind — as “abandoned property.”

Welcome to the next frontier of government creep: digital escheatment.

🧾 The Legal Fine Print

The law specifically targets custodial holdings — your Coinbase, Kraken, and other KYC’d exchange accounts. Here’s what it says:

• If an account shows no “owner-generated activity” (logins, deposits, withdrawals) for three years…

• And the custodian cannot contact the user…

• The custodian must report it to the State Controller and may be required to transfer the crypto asset itself, not fiat equivalent, to the state.

A companion Senate bill, SB 822, makes it crystal clear: “digital financial assets” are now classified alongside traditional unclaimed property — all in the name of “consumer protection.”

🛡️ The Shield of Self-Custody

Here’s the good news: none of this applies if you self-custody.

Your Coldcard, BitBox, Passport, or Sparrow wallet is not subject to state escheat laws. California can’t seize what it doesn’t know exists. There’s no centralized custodian to send a report, no honeypot to monitor. The network is permissionless. The state is blind to your UTXOs — as it should be.

This legislation proves what many of us already know:

Self-custody is not just a best practice. It’s a firewall against state control.

🪦 What Happens to the Forgotten Coins?

You might ask: is this really a problem? Are people just abandoning their Bitcoin?

Sadly, yes. There are countless stories of early adopters losing access, failing to secure seed phrases, or passing away without any inheritance planning. This is the real risk — and ironically, it’s one that no government program can fix. The answer is personal responsibility, not bureaucratic seizure.

But here’s what happens now under these laws:

• Your inactive custodial crypto could be reported to the state.

• If you’ve passed away and your heirs don’t claim it, the state will eventually control it.

• Whether they’ll ever return it — or know what to do with a cold wallet — is another story.

🕳️ Good Luck Getting It Back

Let’s say the worst happens. You lose access, or a loved one passes away and the state escheats their exchange account. Now what?

Well, good luck.

Trying to reclaim escheated property in California — or any state — is slow, bureaucratic, and often impossible without meticulous documentation.

Here’s what it usually requires:

• A notarized claim form and ID.

• Proof of ownership, such as old statements or login records.

• A death certificate and probate documents if you’re an heir.

• Weeks or months of review and correspondence with the State Controller’s Office.

• And even then, there’s no guarantee — especially for assets like crypto where values fluctuate wildly and custodians may have changed hands or policies.

Now imagine trying to do all this with a deceased relative’s Coinbase login and no 2FA access. You're not just navigating red tape — you're locked out forever.

Once Bitcoin enters the belly of the bureaucracy, it may never come out.

🧠 Lessons for Bitcoiners

This moment is a wake-up call. Bitcoin is growing up, and the regulatory state is adapting. But instead of treating Bitcoin as personal property to be respected, they’re treating it like abandoned fiat.

Here’s how you can opt out:

• Use a self-custody wallet. If you don’t know how, learn.

• Maintain a basic level of activity in custodial accounts you haven’t moved from yet — or better, withdraw entirely.

• Create an inheritance plan. Let someone you trust know how to access your Bitcoin in the event of your death — securely.

• Stay informed. These laws start in California but could spread quickly.

⚠️ The Fiat Mindset Still Rules

To lawmakers, crypto is just another asset class to fold into their obsolete systems. They don’t understand Bitcoin’s ethos. They see wallets the way they see bank accounts — something to tax, track, or confiscate when the opportunity arises.

But to Bitcoiners, this isn’t just about money. It’s about sovereignty, privacy, and the ability to opt out of a rigged financial system. And now more than ever, it’s about holding your keys — or surrendering your future.

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“The state can’t seize what it can’t see. Run your own node. Hold your own keys.”

If you’re still leaving your Bitcoin on an exchange “just in case,” now’s the time to reconsider. Because in California, the countdown clock just started.

Not financial or legal advice, for entertainment only, do your own homework. I hope you find this post useful as you chart your personal financial course and Build a Bitcoin Fortress in 2025.

Thanks for following my work. Always remember: freedom, health and positivity!

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