Arizona Governor Bans Bitcoin Fund With Seized Assets

• Arizona bans Bitcoin fund with confiscated crypto assets
• Katie Hobbs reinforces cautious stance on cryptocurrencies
• Other states continue with public reserves in Bitcoin

Arizona Governor Katie Hobbs vetoed the Bill HB 2324 , which called for the creation of a Bitcoin reserve fund financed with cryptocurrencies seized by the state. The proposal earmarked the first $300 of those assets for the attorney general’s office, with the remainder split between the state’s general fund and the new digital fund.

🚨BIG: Arizona Governor Katie Hobbs has vetoed a bill to create a Bitcoin reserve using seized digital assets.

She says this could hurt local police cooperation and is too risky for public funds due to crypto's price swings.

This is her third veto this year on crypto-related… pic.twitter.com/4dRetdcZUK

— Crypto Coin Show (@CryptoCoinShow) July 2, 2025

In justifying the veto, Hobbs said the measure would “disincentivize local authorities” from collaborating in the seizure of digital assets by removing control over the confiscated funds from local jurisdictions. Despite being approved by a vote of 34 to 22 in the House, the chance of an override of the veto is now considered remote.

The decision marks the latest in Hobbs’ conservative regulatory stance on cryptocurrencies. In May, the governor vetoed SB 1025, which would have allowed the state to invest up to 10% of its assets in Bitcoin, and blocked SB 1373, which proposed a similar use of seized digital assets.

On the other hand, not all legislation related to the sector was rejected. Hobbs signed Bill 2749 into law, allowing the state treasurer to manage cryptocurrencies under specific regulatory frameworks, as long as the assets do not come from judicial seizures.

While Arizona is taking a more cautious approach, states like Texas and New Hampshire are moving in the opposite direction. Both have passed legislation to create public reserves in Bitcoin, and at least six other states are considering similar measures aimed at integrating cryptocurrencies into public finances.

The rejection of HB 2324 generated mixed reactions in the crypto community. Some users praised the state’s prudence, while others pointed to the decision as a missed opportunity to innovate in the management of digital assets. Analyst Frank Corva criticized the logic behind the law’s motivation based on the gain from seized assets.

The debate over the role of cryptocurrencies in government finances continues in Arizona, with other proposals in the works, such as SB 1062, keeping the issue at the forefront of the state legislative agenda.