Arizona Governor Katie Hobbs Vetoes Bitcoin Reserve Bill HB2324 Over Law Enforcement Concerns

HKAN | Jul 2

Arizona Governor Katie Hobbs has officially vetoed House Bill 2324, which proposed establishing a Bitcoin and Digital Assets Reserve Fund using proceeds from seized crypto assets. The bill had passed the state legislature earlier this month .

 

 

Why the Veto Happened

In her veto memo, Governor Hobbs stated that HB2324 “disincentivizes local law enforcement from working with the state on digital asset forfeiture by removing seized assets from local jurisdictions.” She explained the concern that diverting seized crypto to a state fund could harm local agencies’ cooperation .

 

This is the third similar crypto-related veto by Hobbs this session, after rejecting bills that would have invested state funds directly in Bitcoin or seized digital assets .

 

 

Legislative Background

Passed Senate may 16–14 and House 34–22 on June 24

 

Would have directed 25% of seized crypto proceeds to the new reserve fund (after attorney general and state general fund allocations)  

 

Modeled alongside other U.S. states like Texas and New Hampshire, but ultimately rejected in Arizona  

 

 

 

Context & Comparison

Arizona has taken a cautious approach:

 

While HB2749 (related to unclaimed virtual assets) was approved, three other crypto reserve proposals have been vetoed this session .

 

Other states like Texas have moved forward with state Bitcoin reserves, allowing seized or taxpayer funds to be held in BTC .

 

 

 

Final Thoughts

Governor Hobbs’ veto reinforces Arizona’s conservative stance on incorporating crypto into public finance. Concerns about undermining local law enforcement cooperation outweighed the potential fiscal benefits of a state-controlled crypto reserve.

 

As other states continue exploring digital asset management, Arizona’s decision shows the varying state-level approaches to crypto policy in the U.S.