Arizona Governor Katie Hobbs has vetoed a bill that proposed creating a state-managed fund to hold seized cryptocurrency assets.
House Bill 2324 aimed to establish a “Bitcoin and Digital Assets Reserve Fund” to manage digital assets confiscated through forfeiture. However, Governor Hobbs rejected the measure on Tuesday, arguing in a letter that the bill would “disincentivize local enforcement from working with the state on digital asset forfeiture by removing seized assets from local jurisdictions.”
Though the bill was initially rejected by the House during its third reading in May, it was later revived and approved by the Senate in a reconsideration vote. The House ultimately passed the measure in a 34-22 vote on June 24.
While the legislature could override the veto with a two-thirds majority in both chambers, such a move appears unlikely unless several lawmakers change their stance.
The bill outlined that the first $300,000 in cryptocurrency seized through criminal forfeiture would be allocated to the attorney general’s office.
Any amount exceeding that threshold would be divided, with 50% going to the attorney general, 25% to the state’s general fund, and the remaining 25% directed to the newly proposed digital assets reserve fund.
Hobbs’ Track Record of Rejecting Crypto Legislation
Governor Hobbs has previously blocked other cryptocurrency-related bills that passed through both chambers of the Arizona legislature.
In May, she vetoed Senate Bill 1025, which proposed the creation of the Arizona Strategic Bitcoin Reserve and would have allowed the state treasurer to invest up to 10% of state funds in Bitcoin. Hobbs rejected the measure, calling cryptocurrencies “untested investments.”
She also vetoed Senate Bill 1373, which aimed to establish a Strategic Digital Assets Reserve using seized digital assets as a funding source.
Arizona Approves Bill to Establish Crypto Reserve Fund
Of the four crypto-related bills proposed in Arizona, three have been vetoed by Governor Hobbs, with only one successfully becoming law.
Enacted in May, House Bill 2749 amends state statutes to incorporate crypto assets into Arizona’s financial and unclaimed property systems. It also establishes the Bitcoin and Digital Assets Reserve Fund, which will be overseen by the state treasurer.
Arizona’s Push to Pass Crypto Legislation
Several other U.S. states are also moving forward with legislation to establish cryptocurrency reserves.
In June, Texas Governor Greg Abbott signed a bill creating the Texas Strategic Bitcoin Reserve, allowing the state to hold Bitcoin as part of its long-term asset strategy.
Earlier, in May, New Hampshire passed legislation permitting the state to invest in both cryptocurrency and precious metals. Additionally, six other state legislatures currently have bills in progress that seek to create similar crypto reserve funds, according to data from Bitcoin Laws.
