Arizona Senate Revives Bill to Fund Reserve with Seized Cryptocurrencies

Arizona lawmakers have revived a bill that aims to establish a reserve fund using seized cryptocurrencies. House Bill 2324, which previously failed in an earlier House vote, has been resurrected following a narrow 16–14 Senate decision on June 19. This decision sends the bill back to the Arizona House for a final reading. If it secures majority support, it will then proceed to Governor Katie Hobbs for approval.

The bill outlines a framework for creating a “Bitcoin and digital assets reserve fund,” which would be funded entirely by cryptocurrencies confiscated during criminal investigations. These digital assets would be sold on state-approved crypto exchanges or similar platforms to ensure fair market pricing and full transparency. However, the bill permits some digital assets to remain in their native form if necessary.

The proceeds from each forfeiture would be allocated as follows: the first $300,000 would be deposited into Arizona’s Anti-Racketeering Revolving Fund. Any amount exceeding that would be split, with 50% going to the same anti-racketeering fund, 25% to the state’s general fund, and 25% to the newly proposed Bitcoin and digital assets reserve fund. The bill mandates safeguarding seized assets using a secure, state-controlled digital wallet, managed by authorized personnel to prevent loss, theft, or unauthorized access. The bill also limits its scope to digital assets forfeited through the Attorney General’s office.

Additionally, HB 2324 modernizes Arizona’s asset forfeiture laws by formally defining how digital assets are treated in criminal cases. It also provides guidelines for protecting innocent third-party owners whose property may have been unknowingly used in illegal activity. This bill reflects a broader trend in Arizona’s growing engagement with crypto legislation. Since 2020, state lawmakers have introduced more than a dozen blockchain-related bills, covering everything from reserve strategies to digital asset custody rules. Some of these bills have since become laws, with the most recent allowing the state to claim ownership of dormant crypto after three years of inactivity. The law also permits the state to stake those tokens or participate in airdrops, redirecting earnings into public funds.

Despite this progress, Governor Hobbs has expressed caution in the past. She vetoed a previous proposal for a Strategic Bitcoin Reserve, citing concerns over volatility and a lack of proven utility. The revival of HB 2324 indicates a continued effort by Arizona lawmakers to integrate cryptocurrencies into the state’s financial framework, despite past reservations from the governor. The bill’s passage would mark a significant step in Arizona’s approach to managing and utilizing seized digital assets, potentially setting a precedent for other states considering similar measures.