House Bill 798, signed on 14 April, requires crypto custodians to transfer abandoned digital assets to the state in-kind rather than liquidating them — and bars the treasury from selling for at least a year.
Virginia Governor Abigail Spanberger signed House Bill 798 into law on 14 April, making the state one of the first in the US to establish a legal framework for handling unclaimed cryptocurrency that does not require its immediate conversion to cash.
The law, which takes effect on 1 July, amends Virginia's unclaimed property statute to cover digital assets explicitly. Its central provision is simple but consequential: when a crypto custodian determines that an account has been dormant for five years and the custodian controls the full private keys needed to move the assets, the firm must transfer the tokens themselves — not their dollar equivalent — to the state's unclaimed property administrator. The state treasurer is then barred from selling those assets for at least one year after delivery.
Delegate C.E. Cliff Hayes Jr., a Democrat, prefiled the legislation on 13 January. It cleared the Virginia House 96–2 on 6 February and the Senate 40–0 on 4 March — margins that suggest the bill encountered almost no political resistance. In a legislature that routinely splits along party lines on financial regulation, near-unanimous support for a crypto-specific property law is unusual enough to deserve attention.
The mechanics are more nuanced than the headline suggests. An account is presumed abandoned after five years of inactivity, but the clock resets if the holder performs any ownership action — buying or selling assets, logging into the account, or even communicating with the custodian. This is broadly consistent with how traditional unclaimed property laws handle bank accounts and securities, extended to accommodate the specific characteristics of digital asset custody.
For custodians with partial key access — a situation that arises with some multisignature arrangements — the law requires them to retain the assets until a full transfer becomes technically possible. If liquidation is genuinely impossible due to technical barriers, the custodian must notify the administrator in writing. The provision acknowledges what legislators in other states have sometimes ignored: not all digital assets can be moved in the same way, and not all custody arrangements grant the same degree of control.
The one-year hold period is the provision that matters most to the industry. Under traditional unclaimed property regimes, states routinely liquidate abandoned securities and deposit the proceeds into the general fund. For volatile assets like bitcoin or ether, immediate liquidation at the point of escheatment could mean selling at a cycle low — permanently destroying value that the rightful owner might have reclaimed months later at a higher price. Virginia's approach gives dormant account holders a twelve-month window to file a claim and receive either the original tokens or, if the state has already sold them after the hold period, the greater of the sale proceeds or the market value at the time of the claim.
Coinbase chief legal officer Paul Grewal called the law good news, noting that it "updates the state's unclaimed property statute to cover digital assets and ensures they are escrowed in-kind." The endorsement from the largest US exchange is unsurprising — Coinbase holds custody for millions of accounts and would be directly affected by any state-level escheatment rules that required forced liquidation.
The broader context is a patchwork. Most US states have not updated their unclaimed property laws to address cryptocurrency at all, creating legal ambiguity for custodians operating across multiple jurisdictions. A handful of states — notably Wyoming and Texas — have enacted crypto-friendly legislation, but Virginia's approach is distinctive in specifying both the in-kind transfer mechanism and the post-delivery hold period. The combination gives it more practical clarity than most existing frameworks.
Whether other states follow Virginia's lead will depend in part on how the law performs in practice. State treasurers accustomed to liquidating unclaimed securities into predictable dollar amounts may resist holding volatile tokens on their balance sheets, even for twelve months. The operational burden of maintaining custody of dozens of different digital assets — each with its own technical requirements — is non-trivial for a state agency that has never done it before. Virginia's unclaimed property administrator will need new infrastructure, new expertise, or a third-party custody arrangement to comply with the law the governor just signed.
