May 2025 │ Legislation & Regulation Update

The Unclaimed Property Legislative Alert

Summary of Legislation — Week Ending May 2, 2025

ALABAMA: Introduced HB 617 which (1) provides definitions for “account activity” and “custodian” as it relates to digital assets, “digital asset”, “digital asset account”, “private key”, and “qualified custodian”; (2) provides that property in a digital asset account is abandoned three (3) years after the date a written or electronic communication was returned as undeliverable or of the last account activity if owner did not receive communication; (3) requires the treasurer to select a qualified custodian to manage any digital assets held; (4) outlines considerations for the treasurer when selecting a qualified custodian; (5) requires the treasurer to enter into a formal agreement with the qualified custodian and further identifies specifications to be included in the agreement; (6) requires, within thirty (30) days of reporting, a custodian to deliver in its native form to the qualified custodian any digital assets that are abandoned and able to be transferred; (7)requires a custodian to report to the qualified custodian digital assets that are not able to be transferred and maintain the digital assets until transfer is possible; (8) requires the custodian to provide a proof of delivery to the treasurer within thirty (30) days of delivery; (9) requires the qualified custodian to maintain the digital asset in its native form for a minimum of two (2) years from transfer to the qualified custodian; (10) requires the qualified custodian to notify the treasurer that the digital asset is eligible for sale after the two (2) year hold period; and (11) requires the treasurer to sell digital assets at the prevailing market price of the digital asset at the time of sale or where there is no prevailing market price, by any commercially reasonable method.

CALIFORNIA: Amended AB 1501 which now (1) provides definition for “digital account holder”, “digital asset”, “private key”, and “qualified custodian”; (2) provides that property in a digital asset account is abandoned three (3) years after the date a written or electronic communication was returned as undeliverable or of the last account activity if owner did not receive communication; (3) defines “exercise of an active of ownership interest” as conducting a transaction regarding the digital asset account, electronically accessing the digital asset account, conducting activity in a different digital asset account owned by owner with same holder, and taking any other action that reasonably demonstrates to the holder that the owner knows the property exists; (4) requires, within thirty (30) days of reporting, a custodian to deliver in its native form to the qualified custodian any digital assets that are abandoned and able to be transferred and to further provide proof of delivery; (5) requires the holder to maintain the digital asset where the holder possesses only a partial private key and is unable to transfer the digital asset until the digital asset can be transferred; and (6) requires the controller to select a qualified custodian by January 1, 2027 and outlines the evaluation criteria for purposes of selecting the qualified custodian. 

With The Unclaimed Property Legislative Alert Summary of Legislation and Regulation, you receive an overview of the latest information on unclaimed property legislative updates, regulatory changes, and statutory amendments across the United States and Canada. The publicly available information contained herein has been compiled by Kelmar Associates, LLC and does not constitute legal advice or analysis of any kind.  The summary information is generally compiled on a weekly basis, as applicable, and is shared on Kelmar's website each month. For more information, please refer to each state unclaimed property bill.