Arizona Senate Revives Bitcoin Reserve Bill for Seized Crypto

Arizona lawmakers have revived a proposal aiming to establish a state-managed Bitcoin and Digital Assets Reserve Fund. This fund would be composed of cryptocurrencies seized through criminal forfeiture.

The bill, termed HB 2324, passed the Senate on June 19 in a 16-14 vote. It has now been moved to the House for further consideration. If it secures majority support, it will head to Governor Katie Hobbs for approval. Recall that this bill was initially rejected in the House in May and was returned to the Senate for amendments. 

Renewed Legislative Effort

HB 2324 proposes the creation of a “Bitcoin and Digital Assets Reserve Fund” managed by the state treasurer. The fund would handle digital assets confiscated through criminal proceedings.

The bill outlines procedures for the secure storage, sale, or retention of these digital assets. This includes the use of state-approved digital wallets and licensed crypto exchanges. It also expands Arizona’s forfeiture laws to include digital assets, establishing clear provisions for their seizure, storage, and allocation. 

Additionally, it provides guidelines for protecting innocent third-party owners whose property may have been unknowingly used in illegal activity.

If enacted, the bill would authorize the state government to invest, reinvest, and divest funds in crypto assets. It would also allow investment in exchange‑traded funds that include digital assets.

The first $300,000 proceeds from each forfeiture would be deposited into Arizona’s Anti-Racketeering Revolving Fund. Any amount exceeding that would be split into several portions. 50% would go to the same anti-racketeering fund, while 25% would go to the state’s general fund. Another 25% would be for the newly proposed Bitcoin and digital assets reserve fund.

Arizona’s Regulatory Efforts

HB 2324 reflects a broader trend in Arizona’s growing engagement with crypto legislation. Since 2020, the state’s lawmakers have introduced various blockchain-related bills, covering everything from reserve strategies to digital asset custody rules.

Some of these bills have become laws, reflecting a proactive stance on cryptocurrencies. Despite the state’s progress, Governor Hobbs has shown a cautious approach to cryptocurrency legislation. She vetoed a previous proposal for a Strategic Bitcoin Reserve, citing concerns over volatility and a lack of proven utility.

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