Arizona’s governor Katie Hobbs has vetoed a bill that would have created a state-managed Bitcoin reserve fund using seized digital assets. House Bill 2324, which cleared the Arizona Legislature last month, proposed the establishment of a “Bitcoin and Digital Assets Reserve Fund.” The fund was designed to hold digital assets confiscated through criminal forfeiture, including Bitcoin, stablecoins, and other cryptocurrencies. The legislation passed the House in a 34-22 vote on June 24 after narrowly clearing the Senate 16-14 on June 20. Lawmakers had revived the bill through procedural motions after the House initially rejected it on May 7. The bill sought to update Arizona’s forfeiture laws to cover digital assets explicitly and outlined procedures for seizing, storing, and liquidating cryptocurrencies and other virtual property obtained in criminal investigations. Under the proposed structure, the first $300,000 in forfeited assets would be directed to the Attorney General’s office. Any remaining funds would be split 50% to the Attorney General, 25% to the state general fund, and 25% to the new reserve fund. In her veto letter , Governor Katie Hobbs raised concerns that the bill would “disincentivize local enforcement from working with the state on digital asset forfeiture by removing seized assets from local jurisdictions.” The veto effectively blocks the creation of the reserve fund unless lawmakers can secure a two-thirds majority in both chambers to override the decision, an outcome considered unlikely given the vote margins. Hobbs maintains caution around crypto HB 2324 is the third cryptocurrency-related measure Hobbs has vetoed this year. In May, she rejected Senate Bill 1025, which proposed creating an Arizona Strategic Bitcoin Reserve that would allow the state treasurer to invest up to 10% of public funds in Bitcoin. Hobbs cited concerns over exposing taxpayer resources to what she called “untested investments.” She also vetoed Senate Bill 1373, which aimed to form a Strategic Digital Assets Reserve funded by seized assets and appropriations. Like SB 1025, this bill would have granted the state authority to actively manage and deploy digital assets, a move the governor viewed as fiscally risky. The only cryptocurrency reserve-related legislation signed into law by Governor Hobbs this year is House Bill 2749. It was signed into law in May and amends Arizona’s unclaimed property laws to include digital assets that have been abandoned for at least three years. Arizona’s Department of Revenue has been authorised to take custody of these assets in their original digital form and establish a Bitcoin and Digital Assets Reserve Fund managed by the state treasurer. Unlike HB 2324, HB 2749 does not involve criminal forfeiture of assets or direct state investment. Instead, it deals with assets already under the state’s control due to dormancy. The state is also permitted to stake these assets or accept cryptocurrency airdrops through qualified custodians, with all proceeds directed to the reserve fund. Across the US, some states have moved ahead with similar crypto reserve initiatives. Texas Governor Greg Abbott recently signed legislation to create the Texas Strategic Bitcoin Reserve , a state-run fund that will hold Bitcoin as part of the state’s long-term assets. Likewise, New Hampshire passed a bill in May allowing the state to invest public funds in cryptocurrencies and precious metals. The post Arizona Governor vetoes Bitcoin reserve fund bill built on seized assets appeared first on Invezz
