Arizona Governor Vetoes Bill Aimed at Establishing Seized Crypto Reserve Fund

Arizona Governor Katie Hobbs has rejected House Bill 2324, which proposed the creation of a state-managed reserve fund for cryptocurrency assets seized through forfeiture.

In a veto letter issued Tuesday, Hobbs argued that the measure would discourage local law enforcement from collaborating with the state on digital asset seizures by redirecting forfeited funds away from local jurisdictions. The bill had previously cleared the state House in a 34-22 vote last week.

HB 2324 would have authorized the State Treasurer to establish a Bitcoin and Digital Assets Reserve Fund, managing crypto assets obtained via criminal forfeiture. If approved, the state could have invested, traded, or liquidated these holdings—including cryptocurrencies or crypto-linked ETFs.

This veto comes just months after Arizona enacted HB 2749, becoming the second U.S. state (after New Hampshire) to pass a crypto reserve law. However, unlike the vetoed bill—which targeted forfeited assets—HB 2749 deals with unclaimed or abandoned cryptocurrencies.