The crypto market is a fast-changing one, and many states are struggling to cope with it. However, a few states are making quick and deliberate moves to develop strong regulatory measures for the market, and Arizona has joined this progressive list. Lawmakers in Arizona have pushed forward a bill that will help the state manage seized cryptocurrency.
House Bill 2324, which is a revived version of the Senate’s Bitcoin Reserve Bill, has passed its third reading, moving the state closer to creating a Bitcoin reserve fund. Some owners of crypto assets buy digital coins to hold them for years, in hopes of reaping rewards in the future from value appreciation. These seasoned investors, however, don’t just blindly buy trendy digital assets; they find out which crypto has 1000x potential or can give them a good return on their investment before committing to a long-term strategy. While this is a popular move, it doesn’t work out every time, especially for those who don’t have in-depth knowledge of the crypto industry.
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What Does HB 2324 State?
HB 2324 was revived by lawmakers who filed many procedural motions asking the Senate to have another look at the bill after it failed to get a final vote in May. The bill has been sent back to the House for final review, and if it gets passed into law, it would lead to the creation of a Bitcoin and Digital Assets Fund. The state treasurer will be responsible for monitoring it. This is similar to the executive order signed by President Trump in March on the creation of a Bitcoin reserve and stockpiling of digital assets.
Much like the executive order, all digital assets seized by the government during criminal investigations will also be directed into this fund. Depending on the security and market conditions at the time of seizure, the state can decide to keep the digital assets in their original form or move them to state-approved wallets. The bill will change forfeiture laws in Arizona to include digital assets. This means that abandoned digital assets can now be seen as unclaimed property.
This bill also falls in line with HB 2749, which was passed into law early this year by Governor Katie Hobbs. HB 2749 became Arizona’s first successful law on creating digital asset reserves, as it allowed for the creation of a fund to manage abandoned digital assets. HB 2749 also sees digital assets as unclaimed property.
What Does HB 2324 Mean For The Industry?
For crypto companies and enthusiasts in Arizona, it shows that the state is taking the lead when it comes to regulating the market and setting an example for others to follow. This new bill follows a pattern of crypto rules introduced by Arizona’s government to create structure and optimally regulate its crypto market.
Since 2017, when it legalized blockchain signatures and smart contracts, Arizona has continued to lead the way in terms of crypto regulation. This bill also shows that the state is taking a proactive approach towards regulating cryptocurrency. With this new bill, Arizona is ahead of many states in creating a robust system and distinct regulatory framework to manage digital assets.
HB 2324 addresses a part of crypto regulation that presents a huge challenge in terms of law enforcement operations. In 2021, IRS‑CI seized cryptocurrency worth more than $3.5 billion. More recently, the Department of Justice (DOJ) seized $225.3 million worth of crypto tied to organized investment scams. Yet, there is no clear procedure on how to manage these seized funds. With this bill, law enforcements know the limit of their operations concerning crypto-related crimes and how to navigate any complexities that may come up during investigations.
By creating separate bills to address different issues, Arizona shows that there are many ways to address the different aspects of the crypto market. With this multi-bill approach, Arizona is leaving the charge for a multi-dimensional approach to crypto regulation, which can be replicated by both federal bodies and other state agencies.
New Crypto Regulations in Arizona
In addition to HB 2324 and HB 2749, other bills have been put forward by the government. In May, Governor Hobbs signed HB 2387, which set new rules to protect customers who use crypto ATMs in the state. She also rejected SB 1025, which proposed that the government should invest around 10% of pension and treasury funds in virtual currencies. The governor blocked this move, stating that investing pension funds in cryptocurrency was risky and untested.
