Virginia enacts new legislation mandating one-year minimum hold for unclaimed cryptocurrency
New Virginia legislation incorporates cryptocurrency and other digital assets into state unclaimed property regulations, mandating in-kind custody transfers and establishing restrictions on liquidation timelines.
Virginia, a state in the United States, has enacted modifications to its framework governing unclaimed property, incorporating cryptocurrency and digital assets into state custody regulations while establishing restrictions on the timeline for selling these assets.
Governor Abigail Spanberger put her signature on House Bill 798 on Monday, officially making it law. This legislation modifies the state's existing Disposition of Unclaimed Property Act, mandating that custodians holding unclaimed cryptocurrency must transfer these digital assets in-kind, which means maintaining their original form, as opposed to converting them into fiat currency.
Additionally, the legislation establishes a mandatory holding period of at least one year before any liquidation can occur. According to the bill's language, "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."
Through the requirement to hold cryptocurrency in its original form, the state minimizes the possibility of forced liquidations occurring during unfavorable market conditions or bear markets, which provides potential benefits for asset owners who eventually come forward to reclaim their holdings.
Through this legislative action, Virginia becomes part of an expanding coalition of states that have incorporated digital assets into their unclaimed property legislation. Last year in May, Governor Katie Hobbs enacted legislation permitting Arizona to assume ownership of unclaimed cryptocurrency following a three-year period and transfer it into a reserve fund managed by the state. The state of California has similarly enacted legislation that brings cryptocurrency under its unclaimed property legal framework.
Virginia sets five-year clock for abandoned crypto accounts
The legislation also provides clarity regarding the conditions under which cryptocurrency accounts are considered abandoned, establishing a five-year period of inactivity as the threshold unless the account owner demonstrates signs of activity, including actions such as logging into their account or executing transactions.
Paul Grewal, who serves as chief legal officer at Coinbase, shared his thoughts on X, stating "Some good news out of Virginia," and further noting that the legislation "updates the state's unclaimed property statute to cover digital assets and ensures they are escheated in-kind."
The Virginia Blockchain Council had previously described the bill as "an important step," asserting that it "helps modernize Virginia's financial laws and signals the Commonwealth's continued engagement with emerging technologies."