Arizona Governor Blocks Crypto Forfeiture Fund, Citing Local Law Enforcement Concerns

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Arizona Governor Katie Hobbs has vetoed HB 2324, a bill proposing a state-controlled reserve for seized cryptocurrency, citing potential harm to local law enforcement incentives.

The legislation would have enabled the State Treasurer to manage forfeited digital assets, including investing in crypto ETFs.

Hobbs’ veto highlights tensions between state and local interests in asset forfeiture programs. The decision comes weeks after Arizona enacted HB 2749, which created a framework for unclaimed crypto assets—making it the second state after New Hampshire to pass such a law.

With other crypto bills under consideration, including one expanding legal tender definitions, Arizona remains at the forefront of state-level digital asset policy debates.