Virginia just rewrote the rules for abandoned cryptocurrency. Governor Abigail Spanberger signed House Bill 798 into law yesterday, creating a new custody framework that protects users from forced liquidations.
The Signal
Virginia's new unclaimed property statute represents a fundamental shift in how states handle dormant digital assets. The law, which takes effect on July 1, 2026, requires cryptocurrency held in customer accounts with no activity for five years to be transferred to state custody. But here's the critical difference: assets must be transferred "in-kind," meaning the state takes possession of the actual tokens rather than converting them to cash immediately. This addresses a long-standing industry concern where states previously liquidated digital assets soon after taking custody, leaving claimants with only the cash value at the time of sale.
The legislation defines digital assets as representations of value used as a medium of exchange, unit of account, or store of value, while excluding in-game currencies and non-transferable rewards. Owner activity includes transactions, account access, or other actions demonstrating awareness of the account—all of which reset the dormancy clock. Custody rules vary based on whether holders like crypto exchanges control the private keys: full control requires direct transfer to the state, while partial control means retaining assets until transfer becomes possible.
