Governor Hobbs Vetoes Arizona Digital Assets Bill
Arizona Gov. Hobbs vetoes HB2324 over asset forfeiture concerns, halting a crypto reserve fund from seized assets.
- Governor Hobbs vetoes HB2324, citing impact on local law enforcement.
- Bill sought to fund state crypto reserve using seized digital assets.
- Raises debates on balance between asset management and policing.
HB2324 Vetoed Over Law Enforcement Concerns
Arizona Governor Katie Hobbs has vetoed House Bill 2324, a proposal that aimed to establish a Bitcoin and digital assets reserve fund. The bill suggested using proceeds from seized digital assets to help fund state operations. However, Governor Hobbs rejected the legislation, stating that it could negatively affect cooperation between local and state law enforcement.
According to her statement, removing seized digital assets from local jurisdictions would make it harder for local agencies to participate in joint operations. This concern played a central role in her decision to block the bill, despite its previous support in both legislative chambers.
What HB2324 Aimed to Do
HB2324 would have allowed the state to collect and store seized cryptocurrencies in a reserve fund. The structure of the bill directed the first $300,000 of these assets to the state Attorney General’s office. Any additional funds were to be split—half remaining with the Attorney General, one-quarter going to the state’s general fund, and the remaining quarter placed into the proposed reserve.
The plan included secure storage requirements, such as third-party custodians and institutional-level management, to handle the crypto assets responsibly. Supporters of the bill argued that it would help Arizona modernize its asset management and leverage growing digital asset markets.
Consistent Policy Approach
Governor Hobbs has maintained a cautious stance on cryptocurrency legislation. This veto follows her rejection of similar crypto-related bills, such as SB1373 and SB1025, which would have permitted the state to invest in digital assets more broadly.
Nonetheless, Hobbs recently signed off on another crypto-related bill, HB2749, which created a separate digital reserve using unclaimed property funds. This indicates a preference for controlled crypto adoption, where risk and jurisdictional clarity are better defined.
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