TL;DR
- Arizona’s Senate passed HB 2324, reviving a plan to create a state-managed Bitcoin and Digital Assets Reserve Fund for handling confiscated cryptocurrencies.
- The fund would allow the state treasurer to retain, sell, or invest seized crypto.
- The bill also modifies forfeiture laws, enabling Arizona to secure digital assets, reflecting a more structured and crypto-forward approach to digital asset governance.
Arizona is pushing ahead in its effort to integrate cryptocurrency into state-level financial infrastructure. After a narrow 16-14 vote in the Senate, House Bill 2324—originally rejected—was revived and is now heading back to the House for final approval. The proposal outlines the creation of a Bitcoin and Digital Assets Reserve Fund, which will be overseen by the state treasurer and used for managing digital assets seized in criminal investigations.
Fund Oversight Brings Structure to Seized Crypto Assets
The bill enables the state to decide whether to hold, liquidate, or invest confiscated cryptocurrencies, depending on security conditions and market trends. It also opens the door to placing seized assets into regulated crypto exchange-traded funds (ETFs), potentially generating returns for the public treasury. This controlled, custodial approach reflects a shift toward treating crypto as a serious financial instrument rather than an unregulated novelty.
Clear guidelines are built into the legislation, including use of licensed custodians and state-approved digital wallets. These custody safeguards aim to align with blockchain-specific protocols, offering legal clarity and increased protection against mismanagement or fraud.
Seizure Rules and Allocation of Funds Clarified
The law also redefines Arizona’s forfeiture statutes to cover digital assets. If an individual linked to the crypto is deceased, deported, has fled, or legal ownership cannot be verified, the state may seize those assets following diligent identification efforts. From the proceeds, the first $300,000 would be directed to the Attorney General’s office. Beyond that, 50% would continue to the AG, with 25% split each between the general fund and the new reserve.
This aligns with broader state-level trends: Arizona Governor Katie Hobbs recently signed HB 2749 into law, which created a separate fund for unclaimed digital assets acquired via staking or airdrops. While she has vetoed more aggressive crypto proposals, including a bill to allow investment of treasury funds into Bitcoin, her selective approvals suggest openness to innovation when taxpayer funds are not at risk.
Arizona’s continued development of crypto regulations signals growing acceptance of digital assets in public financ, an approach that may set a precedent for other U.S. states navigating this evolving space.
