Arizona Lawmakers Push Bill to Create Crypto Reserve From Seized Assets

Arizona’s legislature has proposed establishing a digital asset reserve fund using cryptocurrency seized through criminal forfeiture. The bill, HB 2324, passed the House on Tuesday by a 34-22 vote after narrowly clearing the Senate last week by a 16-14 vote. It now awaits a decision from Governor Katie Hobbs.

The proposal authorizes the state treasurer to manage the Bitcoin and Digital Assets Reserve Fund, which would hold digital assets or ETFs backed by crypto obtained through seizures. The bill also permits the state to invest, reinvest, or divest those assets at its discretion.

Bill Revived After Earlier Defeat

If enacted, HB 2324 would become Arizona’s second digital asset reserve initiative. In May, the state approved HB 2749 to manage unclaimed or abandoned crypto. While HB 2749 focused on dormant assets, the new bill targets crypto acquired through legal forfeitures.

HB 2324 outlines how proceeds from seized crypto should be allocated. The initial $300,000 from seized crypto would be allocated to Arizona’s Anti-Racketeering Revolving Fund. Any amount above that would be split, with half going to the same fund, 25% to the General Fund, and 25% to the new crypto reserve.

The bill initially failed its final reading in the House on May 7. However, it was revived through procedural moves. It then advanced again after the Senate passed an amended version. This set the stage for approval in the House this week.

Governor’s Decision Remains Uncertain

Governor Hobbs’ position remains unclear. Previously, she vetoed Senate Bill 1025, which proposed investing up to 10% of the state’s treasury and pension funds in Bitcoin. She also blocked SB 1373, which aimed to create a state-managed reserve for seized digital assets, citing concerns about market instability.

However, Hobbs has supported regulation in the crypto space. She signed HB 2387 earlier this year, which imposes stricter controls on crypto ATMs to combat fraud and money laundering.

Several other crypto-related bills are under review in Arizona, covering issues such as payment systems, kiosks, and asset security. HB 2324, if approved by the governor, could signal a measured shift in how the state approaches crypto seized through enforcement actions.