Virginia Governor Abigail Spanberger has signed legislation updating the state’s unclaimed property rules to cover digital assets, requiring that dormant crypto be held in its original form for at least one year before any sale can proceed.

Introduced by Delegate C.E. Cliff Hayes Jr. [D], HB 798 amends the Virginia Disposition of Unclaimed Property Act to create a statutory framework for dormant digital asset accounts.

Crypto held in dormant accounts is presumed abandoned after five years of inactivity, according to the legislation.

Spanberger signed the bill on Monday; it takes effect July 1, 2026.

The law puts Virginia in step with a rising movement among states to stop dormant crypto from being automatically converted to cash.

Forced liquidation can trigger tax liabilities for consumers without their knowledge or consent, and wipes out any potential upside if prices rise after assets are handed over to the state.

HB 798 passed the House 96-2 and cleared the Senate 40-0 before reaching Spanberger’s desk.

Coinbase Chief Legal Officer Paul Grewal heralded the law as “good news” in a tweet, adding that it, “updates the state’s unclaimed property statute to cover digital assets and ensures they are escheated in-kind.”

“I believe this is positive for the industry as it helps lay out procedures and recognise digital assets value,” Paul Howard, senior director at crypto trading firm Wincent, told Decrypt, adding that it is “defining the State custody of unclaimed custodial assets, rather than State control of private assets.”

“This likely helps strengthen Virginia as a State where corporations and individuals can feel confident in domiciling their holdings or estates,” he said.

In-Kind hold

Under the law, holders with full private key access must transfer dormant assets to the state in their native form, while those with only partial access must retain them until a full transfer is possible.

The state treasurer is barred from selling any delivered digital assets for at least one year.

The bill also protects holders facing technical barriers, requiring them to notify the administrator in writing if they “reasonably believe it cannot liquidate digital assets,” after which the state will determine an alternative course of action.

HB 798 states that the administrator “may subsequently direct such holder of unclaimed digital assets to liquidate the reported but unremitted digital assets not less than one year following the filing of a report.”

Owners who file a claim within that window are entitled to the greater of the sale proceeds or the market value at the time of the claim.

Last October, California Governor Gavin Newsom signed Senate Bill 822, barring forced liquidation of unclaimed crypto and allowing conversion only 18 to 20 months after filing, with claimants entitled to either their assets or the proceeds.

Trust through clarity

The five-year abandonment timeline “seems a reasonable” tenure “that will improve trust in crypto,” Howard noted.

“This should encourage State bodies to work with reputable liquidity providers and regulated industry counterparties to liquidate holdings,” he added, pointing to Germany’s Bitcoin sell-off in July 2024 as a cautionary example of what poor liquidation execution looks like.

“Hopefully, this approach in the U.S. signals better engagement with OTC desks for these types of trades,” he said.

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Author: Vismaya V