Virginia mandates in-kind holding of dormant crypto
Virginia Governor Abigail Spanberger on Monday signed House Bill 798 into law, overhauling how the state handles unclaimed digital assets and introducing explicit protections against premature forced sales. The legislation takes effect July 1, 2026.
Under the prior regime, state administrators could liquidate crypto shortly after it entered custody, meaning original owners reclaiming assets later would receive cash proceeds calculated at potentially depressed market prices. HB 798 closes that gap by requiring custodians to transfer unclaimed tokens to the state in their native form, and prohibiting any sale for at least one year after the custodian files the required report. The bill's text states the administrator "may subsequently direct such holder of unclaimed digital assets to liquidate the reported but unremitted digital assets not less than one year following the filing of a report."
The dormancy threshold is set at five years of account inactivity, though the clock resets if the owner logs in or executes a transaction, an important carve-out for long-term holders who remain passively engaged.
The law applies a broad definition of digital assets, covering instruments used as a medium of exchange, unit of account, or store of value. It explicitly excludes non-cashable merchant rewards, platform-specific in-game items, and certain regulated securities.
Coinbase chief legal officer Paul Grewal described the signing as "some good news out of Virginia," noting on X that the law "updates the state's unclaimed property statute to cover digital assets and ensures they are escheated in-kind."
Virginia's move follows California, which amended its Unclaimed Property Law in October to include digital financial assets, and Arizona, where Governor Katie Hobbs signed legislation in May 2025 allowing the state to take ownership of unclaimed crypto after three years and place it in a state-managed reserve fund. Unlike Arizona's reserve-fund model, Virginia's framework focuses on preserving asset form and limiting liquidation timing rather than establishing a dedicated state investment vehicle.
