Virginia’s law shifts custody rules, keeping dormant crypto intact to reduce losses from early liquidation events.
Virginia has introduced a new legal framework for handling dormant cryptocurrency accounts, marking another step in the state-level regulation of digital assets. Lawmakers are responding to the growing presence of crypto in financial systems and the need for clearer custody rules. Recent efforts across the United States show a shift toward protecting asset holders from forced liquidation. Virginia’s approach adds a notable safeguard for long-term value preservation.
New Bill Mandates 12-Month Hold on Dormant Crypto Before Sale
Governor Abigail Spanberger signed House Bill 798 into law, with implementation set for July 1, 2026. The statute updates unclaimed property rules to formally include digital assets such as cryptocurrencies.
Under the new law, crypto accounts that remain inactive for 5 years will be transferred to state custody. Instead of selling the assets immediately, authorities will hold them “in kind,” meaning the original tokens remain intact. A mandatory holding period of at least one year must pass before any liquidation occurs.
This provision addresses a long-standing issue where states converted crypto into cash upon receipt. Owners who later reclaimed funds often faced losses due to earlier, lower market prices.
Industry Applauds Virginia’s In-Kind Approach to Unclaimed Digital Assets
Industry participants have reacted positively. Paul Grewal, Coinbase’s chief legal officer, described the update as a constructive move, noting that it allows assets to retain their potential upside during custody.
https://x.com/iampaulgrewal/status/2044156110521901378
The law defines digital assets broadly as representations of value used for exchange, accounting, or storage. It excludes non-transferable items, such as in-game assets and certain rewards programs.
Virginia is following California’s lead, which amended its unclaimed property rules to include cryptocurrencies. Growing alignment among states suggests a more standardized approach may emerge, especially as crypto adoption expands and custody risks become more visible.
