Ohio HB 426: Safekeeping and Management of Unclaimed Digital Assets

The introduced bill defines “digital asset” broadly to include virtual currencies, cryptocurrencies, native electronic assets such as stablecoins and nonfungible tokens, and other digital-only assets that confer economic, proprietary, or access rights or powers. A “digital asset account” would include a customer account, wallet, or other repository maintained with a holder and containing one or more digital assets, and potentially fiat currency or other property.

The bill also defines a “qualified custodian” as either a company that sells digital assets and offers custody services, or a federal or state-chartered bank, trust company, or special purpose depository institution authorized to sell or custody digital assets.

The introduced version presumes digital assets in a digital asset account abandoned two years after returned written or electronic communications, or after the owner’s last act of ownership when communications are not received or tracked. LSC substitute materials indicate that the committee substitute would extend the abandonment period to five years. Owner activity or communication with the holder would stop the abandonment clock under the introduced text.

Where a holder has full control of private keys needed to transfer an abandoned digital asset, the introduced text would require the holder to report and deliver the asset in its native form to the qualified custodian designated by the Director of Commerce within thirty days of reporting. If the holder has only a partial key or cannot transfer the asset, it would maintain the asset until transfer becomes possible.

The bill is structured around native-form custody before liquidation. Under the introduced text, the Director of Commerce would require the qualified custodian to maintain a presumed abandoned digital asset in native form for at least two years before arranging a sale, giving an owner a claim window before sale. If an owner claims an asset still held in native form, the director would cooperate in transferring the property to the owner’s selected custodian.

The introduced text allows the director to sell after the holding period, deposit sale proceeds into Ohio’s unclaimed funds trust fund, and avoid sales below prevailing market price where a market price exists. Fiscal materials for the substitute bill indicate an added authority to sell a digital asset at any time when the asset’s average market capitalization over the preceding twelve months is below a stated threshold; the threshold should be checked against the active committee text.

The Director of Commerce would select a qualified custodian within one year after the relevant section’s effective date if the bill is enacted. Selection criteria include secure storage, cybersecurity controls, private-key management capability, experience handling digital assets, compliance with federal and state digital asset custody rules, reporting to the director, owner-reunification processes, and status as a financial institution under 31 C.F.R. part 1010. The selected custodian would enter a formal agreement covering duties, compensation, termination, and state audit rights.

HB 426 is best categorized as proposed custody, consumer-protection, and state asset-administration legislation, not a general crypto trading, securities, or money transmission bill. Its practical focus is the state pathway for abandoned digital assets: identifying inactivity, preserving assets where feasible, selecting a custody provider, supporting owner claims, and deciding when disposition into the unclaimed funds system may occur.