California Governor Gavin Newsom has signed Senate Bill 1208, a law sponsored by Attorney General Rob Bonta to help return stolen cryptocurrency to fraud victims. In 2025, California led the nation with over $3.67 billion in reported crypto scam losses. The new legislation allows law enforcement to petition courts to distribute seized digital assets to victims, even when perpetrators reside outside U.S. jurisdiction and cannot be prosecuted.
Enactment of Senate Bill 1208
- ▪Senate Bill 1208, signed into law on October 4, 2026, was sponsored by California Attorney General Rob Bonta and introduced by State Senator Tim Grayson.
- ▪California Governor Gavin Newsom signed Senate Bill 1208 on October 4, 2026, to help law enforcement return stolen digital assets to cryptocurrency fraud victims.
Cryptocurrency fraud losses
- ▪In 2025, California ranked first among United States jurisdictions in both cryptocurrency scam complaints and reported losses, which exceeded $3.67 billion.
- ▪Cryptocurrency scams resulted in an estimated national loss of over $75 billion stolen and laundered between 2021 and 2024.
Distribution of seized digital assets
- ▪Senate Bill 1208 allows California law enforcement to petition courts to distribute seized digital assets to fraud victims, even if the assets have been commingled.
- ▪Under Senate Bill 1208, any seized digital assets not distributed to victims will be deposited into the State Restitution Fund to provide victim services.
Senate Bill 1208 procedures
- ▪Senate Bill 1208 enables California law enforcement to return seized cryptocurrency to victims when prosecution and conviction are impossible because perpetrators operate outside United States jurisdiction.
- ▪Senate Bill 1208 establishes a consistent procedure for claimants of seized digital assets to establish the legitimacy of their claims.
Department of Justice scam prevention
- ▪The California Department of Justice shut down 42 fraudulent websites in 2024, which scammed victims out of at least $6.5 million, averaging $146,306 per victim.
- ▪California Attorney General Rob Bonta launched a webpage with resources on red flags, complaint filing, and precautionary measures to help people understand cryptocurrency risks.
Debatable claims
- ▪California should allow the distribution of commingled seized cryptocurrency to fraud victims
- ▪SB 1208 is a significant step toward protecting cryptocurrency fraud victims
- ▪Depositing undistributed seized cryptocurrency into the State Restitution Fund is appropriate
- ▪Distributing seized cryptocurrency to victims without a criminal conviction is justified
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