California expands digital-asset money-laundering powers

California’s chaptered SB 1208 expands money-laundering offences and authorises digital-asset seizure warrants and forfeiture proceedings until 1 January 2032. Governor Gavin Newsom approved the law and it was filed with the Secretary of State on 27 September 2026.

The statute amends Penal Code sections 186.9 and 186.10 and adds section 186.13. It covers specified-value transactions using digital assets and creates a procedure for seizing assets linked to crime, notifying interested parties and resolving claims.

The money-laundering provision applies to transactions exceeding $5,000 within seven days or $25,000 within 30 days. The transaction must involve a monetary instrument or digital asset and be conducted with intent to promote or facilitate criminal activity, or with knowledge that the asset represents proceeds derived directly or indirectly from criminal activity.

California defines a digital asset as a digital representation of value recorded on a cryptographically secured distributed ledger or similar technology. The provision sets value thresholds and mental-state requirements rather than separate rules for particular token categories.

The forfeiture authority uses a separate mechanism. A law enforcement officer or prosecuting agency may seek a search warrant on probable cause that digital assets contain crime proceeds, are traceable to crime proceeds or have been used to facilitate a crime.

The warrant application must identify the centralized exchanges, custodians, addresses or other locations from which assets will be seized. It must describe service, including delivery to a known law-enforcement portal used by a digital-asset business, and specify the amount sought.

A 180-day forfeiture window

Within 180 days of a seizure, a prosecuting agency may apply to a court for a special criminal proceeding to forfeit the assets. The agency must notify readily ascertainable potential owners and anyone with a known security interest.

A claimant has 30 days from service of notice to file a verified claim under penalty of perjury, supported by admissible evidence. The court resolves those claims before issuing a final judgment forfeiting the remaining assets. The law provides for distributions to victims. Assets not distributed may remain in law-enforcement or prosecutorial custody for up to three years before being deposited into California’s Restitution Fund for victim services.

The official text identifies law enforcement and prosecuting agencies as the actors responsible for investigation, warrant applications and custody of seized assets. It does not create a specialist digital-asset authority or specify a process for recovering keys from self-custodied wallets.

The statute also does not identify a later implementation notice or scheduled review. The chaptered law and its 1 January 2032 sunset are the official signals available in the record.