Money laundering: digital assets

Law enforcement and prosecutors can seize digital assets tied to specified crimes or money laundering, even when identifying or convicting an alleged perpetrator is difficult. The law creates a process to return recovered assets to fraud victims and directs unclaimed assets to victim services.

What the law does ​

• Makes transactions using digital assets subject to California’s money-laundering law when they exceed existing dollar thresholds and are intended to facilitate crime or involve criminal proceeds.
• Authorizes warrants to seize digital assets tied to specified crimes, criminal proceeds, or money laundering, including assets held through exchanges, custodians, wallets, and accounts.
• Allows law enforcement or prosecutors to request a 10-day freeze of relevant digital assets while pursuing a warrant, if the recipient can comply.
• Allows prosecutors to seek forfeiture within 180 days after seizure; otherwise, the assets generally must be returned unless another law bars return.
• Requires notice to identifiable owners and security-interest holders, and gives claimants 30 days to submit verified, evidence-supported ownership claims.
• Directs forfeited assets first to compensate victims for actual losses; assets not distributed within three years go to the Restitution Fund for victim services.
• Requires participating law-enforcement or prosecuting agencies to report seizure, claim, and victim-compensation data to the Department of Justice beginning July 1, 2028; the department must annually report to the Legislature and publish the information.

Who it affects ​

• People who use digital assets in transactions intended to facilitate crime or involving criminal proceeds.
• Digital-asset exchanges, custodians, and others able to freeze or surrender assets under law-enforcement requests and warrants.
• Owners, secured creditors, and other claimants to seized digital assets.
• Victims of fraud schemes and related crimes eligible for compensation from forfeited assets.
• Law-enforcement agencies, city attorneys, district attorneys, and the Attorney General.

Context ​

The digital-asset provisions expire January 1, 2032.