- Virginia requires custodians to transfer unclaimed digital assets in-kind, retaining the original crypto instead of liquidating it to cash.
- The state must hold the assets for a minimum of one year before it can direct their sale, protecting against forced sales during market downturns.
- Crypto accounts are considered abandoned after a five-year period of inactivity, unless the owner shows signs of engagement.
Virginia has enacted a landmark law that brings cryptocurrency under its unclaimed property rules, requiring states to hold digital assets for owners rather than immediately selling them. Governor Abigail Spanberger signed House Bill 798 into law this week, fundamentally changing how the Commonwealth manages abandoned crypto assets.
The new measure mandates custodians transfer unclaimed digital assets to the state in-kind. Consequently, the original cryptocurrency is preserved instead of being converted to cash upon escheatment.
A minimum holding period of one year is now required before any sale can be authorized. This provision reduces the risk of the state conducting forced sales during unfavorable market conditions, offering potential upside for future reclamation.
Virginia joins a growing list of states modernizing their unclaimed property laws for the digital age. Arizona and California, for example, have recently passed similar legislation to address the custody of abandoned cryptocurrency.
The law clearly defines when a crypto account is considered abandoned, setting a five-year inactivity clock. Logging in or conducting a transaction is sufficient evidence of owner engagement to reset this timer.
Paul Grewal, chief legal officer of Coinbase, welcomed the development on X. He wrote that the law “updates the state’s unclaimed property statute to cover digital assets and ensures they are escheated in-kind.”
The Virginia Blockchain Council previously endorsed the legislation. The group called it an important step that signals the Commonwealth’s engagement with emerging technologies.
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