Arizona’s New Cryptocurrency Legislation
In a significant move for the cryptocurrency landscape, Arizona Governor recently approved the HB 2749 legislation, marking the state’s inaugural foray into establishing a cryptocurrency reserve. This initiative aims to enhance the management and security of digital assets within Arizona.
Provisions of the Bill
According to details released by the state, the provisions of the bill stipulate that if an asset owner does not respond to outreach within a three-year timeframe, it will be classified as abandoned. Once deemed abandoned, these digital assets must be handed over in their original form to the state’s tax department.
Additionally, qualified custodians in Arizona will be permitted to stake these digital assets, allowing them to earn rewards or accept airdrops. Any benefits garnered through staking or airdrops will contribute to a newly created reserve fund, focusing on Bitcoin and other digital assets, which will be overseen by the State Treasurer and subjected to legislative appropriation processes.
Contextual Incident
This move arises in the context of a notable incident from the previous year involving a Chinese user, who goes by the pseudonym ‘Chu’ and made headlines on the platform Xiaohongshu. In 2021, Chu began amassing cryptocurrencies, later transferring all holdings to the U.S.-based exchange, Coinbase, where he sporadically checked on his assets over time.
However, in June of last year, he was shocked to find himself locked out of his account. Upon reaching out to customer service, he learned that due to inactivity, his account had been closed, and the Bitcoin he held was sold, with proceeds sent to an institution in Wyoming, as Coinbase classified the assets as ‘Unclaimed Property’.
This incident highlights the potential risks and implications for crypto investors regarding account inactivity and asset management, further underscoring the importance of Arizona’s new legislative measures.
