Arizona Governor Vetoes Crypto Seizure Reserve Bill, Citing Law Enforcement Concerns

Arizona Governor Katie Hobbs has vetoed House Bill 2324, a measure aimed at creating a reserve fund to manage crypto assets seized through criminal forfeiture.

Key Takeaways:

• Arizona Governor vetoed a bill that would have created a reserve fund for seized crypto assets.
• The proposal aimed to give the State Treasurer authority to invest or trade seized crypto.
• Texas moved ahead with its own Bitcoin reserve fund.

In a letter released Tuesday, Hobbs argued the bill would discourage local law enforcement from cooperating on digital asset seizures by shifting control of seized crypto assets away from local jurisdictions.

The Arizona House narrowly passed HB 2324 last week in a 34-22 vote.

The proposal sought to give the State Treasurer authority over the Bitcoin and Digital Assets Reserve Fund, allowing the state to invest or trade crypto assets obtained from criminal proceedings, including in exchange-traded funds containing digital assets.

Earlier in May, Arizona approved HB 2749, becoming the second U.S. state to pass a crypto reserve law.

That legislation focuses on handling unclaimed crypto presumed abandoned, whereas HB 2324 specifically targeted assets seized from criminal activity.

Meanwhile, Arizona lawmakers continue to weigh other crypto-related proposals, such as SB 1062, which would recognize cryptocurrencies as legal tender in the state.

Arizona’s move comes as some US states abandon efforts to establish a strategic Bitcoin reserve.

In May, Florida became the latest to drop crypto legislation, joining other states, including Wyoming, South Dakota, North Dakota, Pennsylvania, Montana, and Oklahoma.

On a positive note, last month, Texas Governor Greg Abbott signed Senate Bill 21 into law, establishing a state-funded Bitcoin reserve, the first of its kind in the country.

Unlike similar initiatives in Arizona and New Hampshire, Texas is creating a standalone reserve fund entirely separate from the state treasury.

The fund will be overseen by Texas Comptroller Glenn Hegar and aims to explore Bitcoin as a strategic asset class.

“We can buy land, we can buy gold; I think the state of Texas should have the option of evaluating the best performing asset over the last 10 years,” said bill author Senator Charles Schwertner.

As reported, over the past week, at least nine UK firms, from web design startups to mining businesses, have announced plans to buy Bitcoin or revealed recent purchases to add the cryptocurrency to their corporate treasuries.

Among the UK firms, AI services provider Tao Alpha disclosed plans to raise £100 million after revealing a bitcoin treasury plan that triggered investor interest.

Smarter Web Company, a small website design firm, saw its market value rocket from £4 million to over £1 billion in just two months after announcing its Bitcoin purchases in April, although shares have since cooled.

In the US, Anthony Pompliano’s ProCap BTC acquired 3,724 Bitcoin for $386 million as part of plans to go public through an SPAC merger, while Japan’s Metaplanet raised $517.8 million on the first day of its ambitious “555 Million Plan,” which targets 210,000 Bitcoin by 2027.

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