Arizona Governor Rejects Bill to Use Seized Crypto for Reserve Fund

Arizona Governor Katie Hobbs has rejected a bill letting the state keep cryptocurrency seized in a special fund. The bill, HB 2324, aimed to create a “Bitcoin and Digital Assets Reserve Fund” for managing digital assets from criminal forfeitures.

The bill passed the state Senate after being rejected by the House earlier. It returned to the House, where lawmakers approved it by a 34-22 vote before reaching the governor.

Governor Vetoes Bill for Seized Crypto

Under House Bill 2324, the attorney general’s office would get the first $300,000 of seized crypto. Any remaining amount would be split, with half going to the attorney general and the rest divided equally between the state general fund and the new reserve fund.

However, Governor Hobbs vetoed the bill because she said it would discourage local law enforcement from working with the state. She explained that removing seized assets from local control removes their incentive to assist in digital asset forfeiture cases.

Arizona’s Mixed Approach to Crypto Bills

The HB 2324 veto is not the first time Hobbs has rejected crypto-related bills this year. In May, she vetoed Senate Bill 1025, which would have allowed the state treasurer to invest up to 10% of funds in Bitcoin. She described cryptocurrencies as “untested investments” and expressed concerns about their risks.

Another veto came with Senate Bill 1373, which aimed to create a state treasury from seized digital assets. These actions show Hobbs’ cautious approach to using crypto in state funds.

Despite these vetoes, Arizona has passed one crypto-related bill this year. HB 2749, approved in May, updated state laws to include digital assets in financial and unclaimed property rules. It also set up a Bitcoin and Digital Assets Reserve Fund managed by the state treasurer.

Meanwhile, other US states are moving forward with crypto reserve funds. For instance, Texas Governor Greg Abbott recently signed a bill to create the Texas Strategic Bitcoin Reserve. Additionally, New Hampshire passed a law allowing investments in cryptocurrencies and precious metals.