Lawsuit claims 3.8M dormant BTC using police lost-and-found rules as Congress races to stop it with CLARITY
Section 20216 of the latest CLARITY draft states that a self-custodied digital asset cannot become abandoned, unclaimed, or forfeited. It also cannot become subject to adverse possession or finder's title solely because its owner has not moved it or otherwise shown continued interest.
The language overrides state and local laws that treat years of wallet inactivity alone as grounds for transferring ownership to someone else.
The May 8 and May 20 Senate drafts protected only the ability to hold a self-hosted wallet, and the July 22 version adds scope beyond that, extending into property law and covering whether a person still owns the coins inside that wallet once years of silence go by.
The section defines a self-custodied digital asset as one where the owner keeps exclusive control of the private keys without relying on a custodian, exchange or intermediary.
That definition draws the line the rest of the provision depends on.
| Draft / provision | What it protects | What it does not fully settle |
|---|---|---|
| May 8 / May 20 Senate drafts | The ability to use a self-hosted wallet and hold private keys | Whether dormant self-custodied coins can be treated as abandoned property |
| July 22 Section 20216 | Continued ownership of lawfully self-custodied digital assets | Claims based on more than inactivity, such as fraud, theft, competing ownership evidence, or court-specific facts |
| Custodial assets carveout | Preserves state unclaimed-property rules for exchanges, brokers, and custodians | Dormant assets held by intermediaries may still face state reporting and escheat rules |
From wallet access to property title
Courts would have to draw a line between two categories of digital assets: coins a person controls directly through private keys and coins sitting with an exchange, broker, or custodian. The federal shield from the new CLARITY Act draft goes to the first group.
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