The state of Virginia has enacted new legislation governing how dormant crypto accounts will be handled. Governor Abigail Spanberger signed House Bill 798 into law, with the measure scheduled to take effect on July 1, 2026.
Under the new framework, crypto assets left inactive in customer accounts for five years will be transferred to state custody in-kind, meaning the digital tokens will be preserved in their original form rather than immediately converted into cash. This approach aims to protect asset value and reflect the unique nature of digital currencies.
One-Year Holding Rule Protects Owners From Forced Liquidation
Historically, many state authorities liquidated unclaimed crypto soon after receiving custody, which often resulted in owners reclaiming funds at earlier, potentially lower market values. The updated law now requires that digital assets be held for at least one year before any liquidation occurs.
Industry figures, including Paul Grewal of Coinbase, welcomed the change, noting that preserving crypto assets in-kind aligns better with how digital assets function as long-term stores of value.
Digital Asset Definition Expanded Under Updated Property Rules
The legislation introduces a broad definition of digital assets, covering representations of value used as a medium of exchange, unit of account, or store of value. However, certain categories are excluded, including non-cashable merchant rewards, in-game items limited to specific platforms, and some regulated securities.
Virginia’s move follows similar regulatory updates in California, reflecting a growing trend among US states to modernize unclaimed property laws to accommodate cryptocurrencies and other digital financial assets.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.