Virginia has implemented a new regulatory framework governing unclaimed digital assets, mandating the state to retain dormant cryptocurrency in its original form for a specified duration prior to any potential sale.
On April 14, Governor Abigail Spanberger signed House Bill 798 into law, signifying a notable transformation in the management of abandoned cryptocurrency accounts within the state. The law is set to take effect on July 1, 2026, and revises Virginia’s unclaimed property statute to encompass digital assets.
According to the legislation, cryptocurrency held in customer accounts that display no activity for a period of five years will be deemed abandoned and subsequently transferred to state custody. This represents a departure from the prevailing methods adopted by various jurisdictions, as the assets must be transferred “in-kind.” This means the state is mandated to take possession of the actual tokens rather than converting them to cash upon receipt.
This legislative change addresses a long-standing concern voiced by cryptocurrency users and industry stakeholders. Historically, many states have liquidated digital assets shortly after assuming custody, which has often left owners seeking to reclaim funds with only the cash equivalent at the time of sale. Such practices have subjected claimants to the risk of missing out on potential gains during market surges.
Virginia Must Retain Crypto for One Year
The new statute established by Virginia seeks to mitigate that risk. It stipulates that the state must retain digital assets for a minimum of one year prior to any liquidation activities. During this interval, owners who come forward can reclaim their property in its original form, provided it remains unsold, or may receive either the sale proceeds or the market value at the time of the claim, depending on which amount is greater.
The law defines digital assets as representations of value utilized as a medium of exchange, unit of account, or store of value, while explicitly excluding certain items such as in-game currencies and non-transferable rewards.
It also delineates what constitutes owner activity, including transactions, account access, or other actions indicative of account awareness, all of which reset the dormancy period.
The custody regulations vary based on whether a holder, such as a cryptocurrency exchange, possesses full control of the private keys associated with the assets. If complete control is evident, the holder must transfer the assets directly to the state. Conversely, if control is partial, the holder is required to retain the assets until transfer is feasible. The law further permits the state to direct liquidation in circumstances where it cannot securely preserve certain assets.
Responses from the industry have been favorable. Paul Grewal, Chief Legal Officer at Coinbase, remarked that the legislation ensures the preservation of digital assets in their native form throughout the unclaimed property process.
By adopting this measure, Virginia joins an increasing number of states that are revising unclaimed property laws to account for digital assets. Other states, such as California, have taken comparable steps; however, approaches differ regarding whether assets must be liquidated or retained in their original form.
For cryptocurrency firms operating within Virginia, the law introduces enhanced compliance obligations related to reporting, custody, and transfer procedures.
From the perspective of users, it provides increased protections against involuntary liquidation and offers a clearer pathway for reclaiming assets that may enter dormancy.
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