Arizona Passes Criminal Asset Forfeiture Bitcoin Reserve Bill After Previous Veto Setbacks

Arizona has enacted HB 2324, a bill that creates a Bitcoin and Digital Assets Reserve Fund, consisting solely of seized cryptocurrencies obtained through criminal asset forfeiture proceedings. The bill passed the House of Representatives on a 34-22 vote on June 24, 2025, following Senate passage on a 16-14 vote on June 19, and is awaiting signature by Governor Katie Hobbs to take effect.

The law avoids straight investment by taxpayers using only funds won from criminal cases instead of state money or treasury funds. This approach avoids the complications that led Governor Hobbs to veto previous reserve bills, SB1373 and SB1025, which would have allowed direct state investment in cryptocurrency holdings using public funds.

If enacted, HB2324 would be Arizona’s second Bitcoin reserve bill following HB2749, which established an unclaimed property reserve fund. The emphasis on criminal asset forfeiture sets this bill apart from earlier proposals for greater state investment power in cryptocurrencies. By relying on assets already confiscated by law enforcement, the bill avoids the political risks associated with using taxpayer money.

The bill establishes secure custody practices like blockchain-based access control, third-party custodian requirements, and state-validated digital wallet usage. Asset management provisions enable authorities to seize, liquidate through licensed cryptocurrency exchanges, or hold seized digital assets based on market conditions and strategic objectives.

had raised concerns over speculative investment using tax money in rejecting earlier Bitcoin reserve proposals. The structure of HB2324 addresses such concerns by establishing a separate system that has no connection to tax money or state investment policy, and is instead based purely on law enforcement asset recovery.

The criminal asset forfeiture model presents a useful mechanism for handling cryptocurrency seized during investigations that law enforcement agencies are increasingly encountering. Instead of liquidating digital assets immediately, the reserve fund enables the purposeful and professional holding of recovered coins and tokens.

Law enforcement agencies have increasingly encountered cryptocurrency during criminal investigations involving money laundering, drug trafficking, and financial fraud. The reserve fund allows for organized handling of these assets, avoiding hasty liquidation that could limit the state’s recovery value.

HB 2324 also outlines how forfeited cryptocurrency will be distributed. The first $300,000 will be directed to the Anti-Racketeering Revolving Fund. Any amount beyond that will be split as follows: 50% will continue supporting the same fund, 25% will go to the state’s general fund, and the remaining 25% will be allocated to the newly established Bitcoin Reserve Fund.