Crypto Escheatment Software for Bitcoin Exchanges and Custodians

This guide is for compliance, operations and finance leads at US crypto exchanges, custodians, brokerages, payment apps and fintechs that hold bitcoin for customers. If you have accounts nobody has touched in years, at least one state now expects a report on them, and California expects the coins themselves.

We sell Bitcoin on-chain data, so weigh that. The statute quotes below come from the chaptered text of California SB 822, the block heights come from calls we made on 1 October 2026 and were cross-checked on a second explorer, and where a workflow vendor or a law firm does part of the job better, we say so.

What happens to unclaimed bitcoin?

It escheats to a state. When a customer shows no ownership activity for the state's dormancy period, typically three to five years, the holder must notify them, report the account and hand the property over. Most states still expect crypto to be sold and remitted as cash. California is the exception: since SB 822 it wants the bitcoin itself.

The holder is the business, not the customer. If your platform keeps the keys, the dormant balance is yours to report. Self-custody wallets nobody controls but their owner are outside unclaimed property law entirely, because there is no holder to report them.

What California SB 822 changed

Governor Newsom approved SB 822 on 11 October 2025 as Chapter 660 of the statutes of 2025. It adds Section 1516.5 to the Code of Civil Procedure, and four rules in it change how a bitcoin holder works:

• Three years. A digital financial asset escheats if unclaimed for more than three years from a returned communication or, when you cannot track returned mail, from "the last exercise of an act of ownership interest by the owner."
• Notice six to twelve months ahead. The owner notice goes out not less than 6 nor more than 12 months before the asset becomes reportable, under the heading the statute prescribes.
• In kind, within 30 days. The holder must "transfer the exact digital financial asset type, private keys, and amount, unliquidated" to the Controller's custodian no more than 30 days after the final date for filing the report.
• The state waits before converting. The Controller converts delivered digital assets to cash no sooner than 18 months and no later than 20 months after the report is filed, and an owner who claims before then gets the coins back, not cash.

One more clause matters to anyone running multisig. If the holder has only a partial private key or cannot otherwise move the asset, it must keep holding the asset until it can. A cold vault that needs three signers is not an excuse, it is a timeline problem.

Crypto escheatment tools compared

Most holders need two rows, not one: a workflow tool or firm for the legal process, and a data source for the numbers that go into it. If your customer balances live only in an internal ledger over one omnibus wallet, the dormancy question is answered by your own logs, and the chain matters mainly when you deliver in kind.

How long before crypto is considered abandoned?

Three years in California, measured from the last act of ownership interest or a returned communication. Other states that cover virtual currency mostly use three to five years, and some set different periods by property type. Check each state where your customers' last known addresses sit, because the owner's address, not your office, decides which state's law applies.

Why "last transaction date" is the wrong dormancy test

Anyone can send bitcoin to any address. That means an inbound payment proves nothing about the owner, yet the quickest check a team reaches for, the date of the last transaction an explorer shows, counts it as activity.

We checked the clearest example there is. On 1 October 2026 the address that holds the genesis block reward, 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa, showed 66,650 transactions and 79,768 outputs received. Its most recent transaction landed in block 969,417 at 07:56 UTC that morning and paid it 546 satoshis. Every one of its 25 most recent transactions was inbound only, and the address has spent zero outputs, ever. By the last-transaction test it was active today. By any honest reading of "act of ownership interest" it has never been touched by its owner.

Your customers' deposit addresses get the same traffic on a smaller scale: dust from address poisoning campaigns, consolidation leftovers, exchange spam. A dormancy rule built on "any transaction" will keep resetting the clock on accounts that are in fact abandoned, and you will under-report. The test that holds up is the last outgoing spend signed for that address, read together with logins, withdrawals and other account events in your own systems. Our dormant Bitcoin wallet data screens addresses by last spend rather than last touch for exactly this reason, and the dust attack detection API flags the inbound noise.

Which block is the as-of date?

California holder notice reports are prepared as of 30 June or the holder's fiscal year end. A date is not a block, so pick the timezone and write the height into the file. For 30 June 2026 we measured:

Forty-one blocks separate the UTC and Pacific answers for 30 June. Block timestamps are also not strictly in order: 956,180 is stamped two minutes before 956,179, and three blocks on the morning of 1 October were stamped earlier than their parents. Both June cutoffs above still fall cleanly, but the safe method is to state the height you used, the timezone you meant and the rule (last block stamped before midnight), so an examiner can re-run it. The balance history API returns any address balance at that height.

Do crypto exchanges have to report unclaimed property?

Yes, when they hold customer assets. Coinbase and Binance.US both publish escheatment pages telling customers that dormant balances are reported to states, which is a fair sign of how the larger platforms read the law. The obligation sits with whoever holds the property, so custodial wallet apps, brokerages that custody crypto and payment apps with stored balances are in scope as well.

What an in-kind delivery file should contain

1. The owner record and the dormancy evidence: last login, last withdrawal, and for segregated addresses the last outgoing spend with its txid and block.
2. The balance at the report's as-of block, in integer satoshis, with the height and the timezone rule written down.
3. The balance immediately before delivery, because dust may have arrived since the report and the statute asks for the exact amount.
4. The delivery transaction: txid, block height, the Controller custodian address and the amount received, read from the chain rather than from your wallet software.
5. For multisig or split-key setups, a note on when each signer was available, since a partial key lets you hold the asset longer but not ignore it.

Point four is where a data source earns its fee. Your wallet software tells you what it sent; the chain tells you what arrived and when it confirmed, and a Bitcoin audit trail API gives you that record in a form an auditor can re-perform.

Escheatment disputes do reach court, usually over which state has priority or what counts as owner activity. If counsel needs to see how judges in your states have read dormancy language, a case law search on those phrases is a faster start than a general web search, and it keeps the legal research next to the data research in the same file.

What should you look for in crypto escheatment software?

Five things, in this order. State coverage that includes digital asset rules, since many state systems still lack crypto fields and need fallback codes. A dormancy engine that lets you define activity as owner-initiated events, not any inbound transfer. Owner notices that meet each state's wording and 6 to 12 month window. Support for in-kind delivery as well as liquidation. And an export of per-owner evidence an examiner can check without access to your systems.

The last two are where workflow platforms lean on your data. If you already hold bitcoin in segregated addresses, give the workflow tool clean inputs: a bulk balance check across every flagged address at the as-of block, plus the last outgoing spend per address. On BitcoinDatabase that is one SQL query on Growth at $199 a month, or a loop over the REST balance endpoint on Developer at $49.

For the broader period-end picture, our guide to the Bitcoin API for corporate treasury and auditors covers cutoff blocks for quarter and year ends, and the balance history API comparison tests five providers against the chain.

BitcoinDatabase provides informational on-chain data only. It is not legal advice, and unclaimed property rules differ by state and change often. Statute text is quoted from California SB 822 as chaptered on 11 October 2025; confirm current requirements with the State Controller's office or counsel before you file.