A new California law lets police who seize cryptocurrency from scammers ask a court to give it back to the people who lost it. Attorney General Rob Bonta announced on Oct. 2, 2026, that Gov. Gavin Newsom signed Senate Bill 1208, a measure Bonta sponsored and Sen. Tim Grayson, a Concord Democrat, wrote. His office’s announcement gives no date for when the law takes effect.
What the law lets police do
When law enforcement seizes digital assets under a search warrant, the law lets it petition a court to distribute them to fraud victims, as long as the assets are proceeds of the crime or were used to carry it out. The Attorney General’s office says this works even when the stolen money has been mixed with other funds. It also says police can seek the return of seized crypto when the people behind a scam are beyond U.S. jurisdiction and no conviction is possible.
The bill also sets a standard process for people to prove their claims. The release does not describe that process step by step, so the forms, deadlines and proof a victim would need are not public yet in this announcement.
Who this helps comes down to one condition: a California agency has to catch the crypto first. A person who sent money to a scammer and has heard nothing from police has no claim under this law until officers seize something and ask a court to hand it out. The release does not say that victims outside California are covered.
Estimates like the $75 billion nationwide figure for 2021 through 2024 change as researchers and agencies count more cases.
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Why the state wanted this
Bonta said in the release that “cryptocurrency scammers can steal a family’s life savings in seconds.” The office says crypto scams stole and laundered more than $75 billion nationwide from 2021 to 2024, and that California ranked first among states for crypto scam complaints and reported losses in 2025. In 2024, the Justice Department shut down 42 fraudulent websites that scammed victims of at least $6.5 million, an average loss of $146,306 per victim.
Grayson said in the release that more needs to be done to stop the fraudsters, and called the law a major step toward better outcomes for fraud victims.
Where leftover money goes
Under the law, seized assets that are not distributed to victims go to the State Restitution Fund, which is run by the California Victim Compensation Board and may be used only for victim services.
That matters when the number of victims is large and the seized amount is small. A court has to decide who gets what, and money left after claims are paid stays in the victim fund.
What is still unknown
The Attorney General’s office has not published the law’s effective date, the court that would hear these requests in a given case, or how fast a petition is likely to move. It has also not said how a person who thinks their money was seized would learn that police hold it. Those details will come from the bill text, the courts and the agencies that run seizures.
Reporting a crypto scam in California
Police can only petition for assets they know about, so a report is the first step. The FBI’s Internet Crime Complaint Center collects reports of cyber-enabled crime and shares them with FBI field offices and other law enforcement partners. The Federal Trade Commission takes reports at ReportFraud.ftc.gov and, in its guidance for people who paid a scammer, says to contact the exchange or crypto ATM operator right away, say the transaction was fraudulent and ask for a reversal.
The wallet addresses, transaction records, screenshots and web addresses of the platform give investigators something to trace. IC3 says it does not work with law firms or crypto services to recover funds, so a firm that offers to get crypto back on its own is not acting for the agency.
Crypto is harder to claw back than a card payment. The FTC page says plainly that crypto has fewer protections than cards, which is why a fast report matters and why a court-ordered return from seized funds, where it happens, would be a different route from a bank reversal. Bonta’s announcement leaves it to the courts to decide who is paid, and in what amounts, once a petition is filed.
The announcement ends without a list of agencies that will use the new power, and it names no case in which a victim has been repaid so far. Anyone following the law will find the next detail in the court filings that follow each seizure.
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This article was produced with AI assistance and edited for accuracy against the sources linked above.
