The Unclaimed Property Law (UPL) prescribes the circumstances under which intangible property escheats to the state, including how and when apparent owners must be notified that their property is at risk of escheating and the manner in which escheated property must be delivered to the State Controller. Intangible property is only subject to the UPL if the apparent owner’s last known address is within the state or, if that address is unknown, if there is another link to the state, as specified. Existing law provides how and when securities that escheat to the state pursuant to the UPL may be sold and how the securities or funds from their sale may be returned to their owner.

This bill would clarify that digital financial assets are a form of intangible property subject to the UPL. With regard to digital financial assets, the bill would specify that an apparent owner’s last known address need not be a complete mailing address if the address is sufficient to identify that it is within the state. The bill would prescribe requirements for holders of digital financial assets to notify apparent owners prior to the assets escheating, which would include a form created by the Controller that may be returned to the holder by the apparent owner to restart the escheatment period, as specified. The bill would specify how escheated digital financial assets must be transferred from the holder to the Controller. The bill would authorize the Controller to select one or more custodians for the management and safekeeping of digital financial assets that have escheated to the state, as specified. The bill would authorize the Controller to convert digital financial assets to fiat currency, as specified. The bill would entitle a person who makes a valid claim for a digital financial asset delivered to the Controller to receive that digital financial asset or, if the asset has been converted, to receive the net proceeds received by the Controller from the sale.