Arizona Governor Hobbs vetoes the encryption asset seizure bill HB 2324, state-level Bitcoin reserve plan thwarted.

Arizona Governor Katie Hobbs ( Katie Hobbs ) vetoed House Bill 2324 ( HB 2324) on Tuesday. The bill aimed to create a state-level Crypto Assets reserve fund specifically to manage crypto assets seized through criminal forfeiture procedures.

Hobbs stated in the veto letter that the bill would transfer control of crypto assets from local jurisdictions, which could hinder the willingness of local law enforcement to cooperate in the seizure of digital assets.

Last week, the Arizona House of Representatives narrowly passed HB 2324 with 34 votes in favor and 22 votes against.

Core of the Bill: State Treasurer Controls Seizure of Crypto Assets

• The HB 2324 proposal aims to grant the State Treasurer the authority to manage the Bitcoin and digital asset reserve fund.
• Allow state governments to invest or trade in crypto assets seized through criminal justice proceedings, including investments in exchange-traded funds (ETF) that contain digital assets.

Background: Arizona just passed another Crypto Assets law last month

• In early May this year, Arizona approved HB 2749 and became the second state in the United States to pass laws related to Crypto Assets reserves.
• HB 2749 primarily deals with Crypto Assets presumed to be unclaimed/abandoned, while HB 2324 specifically targets assets seized from criminal activities.

Other encryption proposals in progress

• Arizona legislators are still weighing other Crypto Assets-related proposals, such as SB 1062, which aims to recognize Crypto Assets as legal tender within the state ( legal tender status ).

Diverging Trends in State-Level Bitcoin Reserve Programs in the U.S.

• This move by Arizona comes as some states in the U.S. abandon efforts to establish strategic Bitcoin reserves.
• In May this year, Florida became the latest state to abandon relevant legislation, following Wyoming, South Dakota, North Dakota, Pennsylvania, Montana, and Oklahoma.
• Positive Signal: Texas Pioneers State-Level Bitcoin Reserve Fund
  • Last month, Texas Governor Greg Abbott signed Senate Bill 21 (SB 21) into law, establishing a state-funded Bitcoin reserve fund, which is the first of its kind in the United States.
  • Unlike similar initiatives in Arizona and New Hampshire, Texas has created an independent reserve fund that is completely independent from the state treasury.
  • The fund will be overseen by Texas Comptroller Glenn Hegar, aiming to explore the value of Bitcoin as a strategic asset class.
• The bill's sponsor, Senator Charles Schwertner, stated: "We can buy land, we can buy gold; I believe Texas should have the right to assess the best-performing assets of the past decade (referring to Bitcoin)."

Accelerated Corporate Bitcoin Reserve Allocation

• In the past week, at least nine UK companies (ranging from web design startups to mining enterprises) have announced plans to purchase Bitcoin or revealed recent actions to incorporate Crypto Assets into their corporate treasury purchases, including:
  • The UK artificial intelligence service provider Tao Alpha plans to raise £100 million after disclosing its Bitcoin financial plan which has piqued investor interest.
  • The small web design company Smarter Web Company announced the purchase of Bitcoin in April, and its market value skyrocketed from £4 million to over £1 billion in just two months (although the stock price later corrected).
• In the United States, Anthony Pompliano's ProCap BTC has acquired 3,724 coins for $386 million as part of its plan to go public through a SPAC merger.
• Japan's Metaplanet raised $517.8 million on the launch day of its ambitious "$5.55 Billion Plan", aiming to hold 210,000 coins by 2027.