Governor Gavin Newsom signed Senate Bill 1208, legislation that gives California law enforcement new authority to return cryptocurrency stolen in fraud schemes to victims. The law allows police who seize digital assets during criminal investigations to petition courts for distribution to victims even when the perpetrators cannot be prosecuted because they are located outside the U.S.
California has been particularly hard hit by cryptocurrency fraud. In 2025, the state ranked first among states in both the number of complaints and reported losses due to cryptocurrency scams, with victims reporting more than $3.67 billion in fraud. Cryptocurrency scams have resulted in over $75 billion stolen and laundered nationwide from 2021 to 2024.
A key challenge in cryptocurrency fraud cases is that digital assets frequently move through multiple accounts and are commingled with other funds, making it difficult for victims to trace stolen money and for prosecutors to pursue offenders operating from outside U.S. jurisdiction.
Senate Bill 1208 allows law enforcement to seek court orders returning seized digital assets to victims if those assets are proceeds of, or used to facilitate, the underlying fraud. The law establishes a procedure for victims to prove their claims to seized assets. Digital assets not distributed to victims will be deposited in the State Restitution Fund, administered by the California Victim Compensation Board, for victim services.
Attorney General Rob Bonta, who sponsored the legislation, said the office is working to help Californians understand cryptocurrency risks. "Cryptocurrency scammers can steal a family's life savings in seconds and getting that money back shouldn't take years of navigating legal uncertainty," he said. The California Department of Justice shut down 42 fraudulent websites in 2024 that scammed victims out of at least $6.5 million, with an average loss per victim of $146,306.