Virginia has officially enacted a groundbreaking new framework for handling unclaimed digital assets, marking a significant shift in how the state manages abandoned cryptocurrency accounts. Governor Abigail Spanberger signed House Bill 798 into law on April 14, with the legislation set to take effect on July 1, 2026. This updated statute explicitly includes digital assets within Virginia’s existing unclaimed property laws, addressing a critical area of financial regulation in the digital age.

Under the new law, cryptocurrency held in customer accounts that remain inactive for a continuous period of five years will be presumed abandoned and subsequently transferred into state custody. A key innovation of this legislation is the requirement for assets to be transferred “in-kind.” This means the state will take possession of the actual digital tokens, rather than converting them into cash immediately upon receipt, a practice common in many other jurisdictions.

This “in-kind” approach directly addresses long-standing concerns within the cryptocurrency community. Previously, if states liquidated digital assets soon after taking custody, owners who later reclaimed their funds would only receive the cash value at the time of sale, potentially missing out on significant market gains if the asset's value increased. Virginia's new statute aims to mitigate this risk by mandating that the state hold digital assets for at least one year before any liquidation can occur. During this one-year period, owners who come forward can reclaim their property in its original digital form, provided it has not yet been sold. If the asset has been liquidated, claimants will receive either the sale proceeds or the current market value at the time of the claim, whichever is greater.

The law provides clear definitions for digital assets, categorizing them as representations of value used as a medium of exchange, unit of account, or store of value, while explicitly excluding items like in-game currencies and non-transferable rewards. It also outlines what constitutes “owner activity” – such as transactions, account access, or other actions demonstrating awareness of the account – which effectively resets the five-year dormancy period.

Custody rules under the new framework are contingent upon whether a holder, like a crypto exchange, possesses full control over the private keys associated with the assets. If full control exists, the holder is required to transfer the assets directly to the state. In cases of partial control, the holder must retain the assets until a direct transfer becomes feasible. The law also grants the state the authority to direct liquidation if it determines it cannot safely custody certain assets.

The industry reaction to Virginia’s proactive stance has been overwhelmingly positive. Paul Grewal, Chief Legal Officer at Coinbase, lauded the measure for ensuring that digital assets are managed in a manner that preserves their native form throughout the unclaimed property process. Virginia now joins an expanding list of states, including California, that are modernizing their unclaimed property laws to accommodate digital assets, though specific approaches to liquidation versus in-kind holding may vary.

For cryptocurrency firms operating within Virginia, this law introduces new compliance obligations related to reporting, custody, and transfer procedures. For individual users, it establishes stronger protections against involuntary liquidation and provides a more transparent and equitable pathway for reclaiming dormant digital assets.