Unclaimed property: digital financial assets.
If enacted, SB822 will significantly impact existing statutes on unclaimed property, particularly with regard to the treatment of digital financial assets. By formally acknowledging virtual currency under the UPL, the bill will require holders of such assets to follow stricter notification procedures before those assets can be considered unclaimed. This change not only aims to increase the number of owners who can reclaim their assets, but also holds businesses accountable for ensuring proper communication with customers regarding their unclaimed digital property. Ultimately, this could increase the administrative burden on businesses involved in managing digital assets.
Senate Bill 822, introduced by Senator Becker, seeks to amend the Unclaimed Property Law (UPL) to specifically include virtual currency and digital financial assets as tangible forms of property subject to escheatment to the state. The bill establishes the requirements under which apparent owners must be notified when their digital assets are at risk of escheating, thereby seeking to protect owners' interests in their intangible property. The legislation clarifies that an owner's last known address need not be completely accurate, as long as it is sufficient to establish a link to California, broadening the definitions regarding how owners are identified and notified about their unclaimed assets.
The sentiment around SB822 appears to be cautiously optimistic, with supporters arguing that it is a necessary step towards modernizing the law to keep pace with technological advancements in finance. Advocates suggest that clearer rules about digital assets will enhance consumer protection. However, some concerns have emerged regarding potential confusion among business holders about compliance and the challenges of notifying owners about unclaimed virtual currencies, given their fluid nature. Thus, while the initial reception is supportive, careful scrutiny and adaptation will be necessary as the bill progresses.
Notable contention surrounds the practical implications of including digital assets under the UPL. Critics raise concerns over the feasibility of tracking and notifying owners of digital currencies, especially when compared to more traditional forms of property. Additionally, there are apprehensions about states potentially taking custody of assets that they may not have the capacity to manage safely and effectively. There is an ongoing debate about whether the inclusion of such assets is in the state's best interest and how it might affect the broader regulatory landscape for digital currencies.