California lawmakers have passed AB-1052, a bill that could allow the state to seize unclaimed cryptocurrency holdings from exchanges after three years of inactivity. The bill, which progressed unanimously through the Assembly, requires cryptocurrency holders to demonstrate ownership by performing actions such as transactions or accessing their accounts at least once every three years. Critics have voiced concerns that the bill undermines the privacy principles of cryptocurrency, fearing that their assets could be permanently seized. However, supporters argue that unclaimed cryptocurrencies would not be liquidated but instead held by a custodian for users to reclaim. Proponents emphasize that customers' assets would remain intact in their original form rather than being sold off, potentially allowing holders to benefit from any appreciation in value. The bill aims to regulate digital asset payments and business activities in California and will now move to the Senate for further discussion. Experts in the field reiterate that the legislation aligns with existing unclaimed property laws seen in other states, assuring that assets can be returned when owners reach out to the state.

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