Arizona Senate Passes Bill to Manage Seized Bitcoin

Arizona lawmakers have revived and advanced House Bill 2324 (HB2324), a proposed legislation aimed at creating a state-managed fund for Bitcoin and other digital assets seized through criminal forfeiture. The bill, which was initially introduced in the Arizona House of Representatives in February, passed the Senate in early May but failed to secure final approval in the House. However, through a series of procedural motions to reconsider in both chambers, the bill was revived in mid-June and cleared the Senate in a narrow 16–14 vote on Thursday. It is now awaiting a final vote in the House.

HB2324 seeks to establish a Bitcoin and Digital Assets Reserve Fund under the state treasurer’s oversight. This fund would be responsible for managing digital assets confiscated through criminal asset forfeiture. The proposed legislation outlines three options for handling seized digital assets: storage in state-approved digital wallets, sale through licensed crypto exchanges, or retention in native form based on market and security factors. The bill also modifies Arizona’s forfeiture laws to include digital assets and establishes modern custodial standards, incorporating blockchain-based access protocols and qualified third-party custodians.

Under the proposed distribution structure, the first $300,000 from seized digital asset sales would go to the Attorney General’s Office. Additional proceeds would be split, with 50% going to the Attorney General, 25% to the state general fund, and 25% to the new Bitcoin and Digital Assets Reserve Fund. The legislation would allow fund assets to be invested in digital assets or crypto ETFs, with earnings returning to the state.

This development comes as Arizona has taken significant steps toward integrating digital assets into its financial infrastructure. On May 7, the state welcomed its first Bitcoin reserve bill with the signing of House Bill 2749 (HB2749). This legislation establishes a state-managed Bitcoin and Digital Assets Reserve Fund, composed of digital assets acquired through airdrops, staking rewards, and interest. The passage of HB2324 in the Senate, with a close vote indicating the divisive nature of the legislation among lawmakers, reflects a growing trend among U.S. states to explore the integration of cryptocurrencies into their financial systems. Other states like New Hampshire and Texas are also considering similar legislation.

The outcome of the House vote on HB2324 will be crucial in determining whether Arizona will become one of the first states to officially adopt Bitcoin as a reserve asset. If approved, this could set a precedent for other states to follow, positioning Arizona as a leader in state-level cryptocurrency adoption. The bill's progress highlights the state's efforts to modernize its financial infrastructure and adapt to the evolving landscape of digital assets.