Nikolas Sargeant
Arizona Governor Katie Hobbs has vetoed House Bill 2324, which would have established a state fund to manage seized cryptocurrency assets. The governor cited concerns that the legislation would discourage local law enforcement cooperation by removing forfeited digital assets from local jurisdictions. The bill had passed the Arizona House in a 34-22 vote on June 24 after being revived by the Senate in a 16-14 vote, with Republican Senator Jake Hoffman being the sole GOP member to oppose the revival effort.
The proposed legislation would have created a "Bitcoin and Digital Assets Reserve Fund" with a specific distribution mechanism for forfeited crypto. Under the bill's terms, the first $300,000 worth of seized cryptocurrency would go directly to the attorney general's office. Any amount exceeding that threshold would be divided among three recipients: 50% to the attorney general, 25% to the state general fund, and 25% to the new reserve fund. The legislation would also have expanded Arizona's existing forfeiture laws to include procedures for seizing digital assets from deceased, deported, or fugitive individuals when no legal owner could be identified.
This marks the third cryptocurrency-related bill that Governor Hobbs has rejected this year. In May, she vetoed Senate Bill 1025, which would have allowed the state treasurer to invest up to 10% of state funds in Bitcoin, calling cryptocurrencies "untested investments." She also rejected Senate Bill 1373, another strategic digital assets reserve proposal, due to concerns about exposing public funds to cryptocurrency volatility. However, she did sign Arizona House Bill 2749 into law, which integrates crypto assets into the state's unclaimed property framework and allows the state to retain unclaimed crypto without using taxpayer funds. The veto has drawn criticism from Bitcoin advocates, including State Senator Wendy Rogers, who co-sponsored one of the rejected bills and argued that Arizona is missing opportunities in a growing economic sector.
Arizona's crypto legislation efforts reflect a broader national trend, with multiple states pursuing similar digital asset reserve policies. Texas recently established its own Strategic Bitcoin Reserve through legislation signed by Governor Greg Abbott, while New Hampshire passed a bill enabling cryptocurrency investments. According to Bitcoin Laws data, six other state legislatures currently have crypto reserve bills at various stages of the legislative process.
