Virginia Enacts Law Mandating In-Kind Holding of Unclaimed Crypto Assets
On April 13, 2026, Virginia Governor Abigail Spanberger took a significant step in protecting digital property rights by signing House Bill 798 into law. This groundbreaking legislation amends the state’s Disposition of Unclaimed Property Act, extending its reach to include digital assets such as cryptocurrencies. Under this new law, custodians are required to hold unclaimed crypto assets in their original form, termed “in-kind,” for a minimum period of one year before any liquidation can occur.
Context
The incorporation of digital assets into unclaimed property laws follows the rapid rise of cryptocurrency adoption and the pressing need for regulatory frameworks that reflect these changes. Historically, custodians would immediately convert unclaimed crypto assets into cash, often compromising the future value for the rightful owners if the market price increased. By mandating that these assets remain in their original cryptocurrency form and instituting a waiting period before liquidation, Virginia aims to safeguard the interests of individuals who may reclaim their assets with greater value at a later date.
Key Details
House Bill 798 specifically mandates that custodians transfer unclaimed digital assets in their original cryptocurrency format rather than cashing them out. This requirement ensures that owners can reclaim their assets in the form they intended. The law establishes a minimum inactivity period of five years before an account is officially declared abandoned. However, if the account owner periodically engages with the digital asset—by logging in or performing transactions—theirs will not be classified as abandoned.
After the mandatory one-year holding period, state authorities have the option to direct custodians to liquidate the assets if necessary. This approach not only preserves the original value of the assets during the holding period but also mirrors similar initiatives in other states. For instance, California’s Senate Bill 822 also mandates in-kind holding of unclaimed crypto, indicating a growing national trend towards more favorable treatment of digital assets in unclaimed property legislation.
Implications
Virginia’s new in-kind holding requirement for unclaimed digital assets signifies a broader movement across states to update financial legislation in response to the rapidly evolving digital landscape. The shift toward preserving the original form of these assets benefits consumers by enhancing their chances of reclaiming their property in a condition that accurately reflects its market value. This evolution in law highlights the state’s recognition of the importance of digital assets and their rightful ownership.
Furthermore, this legislation represents a paradigm shift in how states handle unclaimed property by prioritizing the interests of citizens over immediate state revenues from liquidations. By delaying the conversion of assets, Virginia acknowledges and bolsters the principle of ownership in the digital economy.
Outlook
Virginia’s House Bill 798 will come into effect on July 1, 2026, giving custodians and digital asset holders ample time to prepare for compliance with these new regulations. Stakeholders should begin to strategize on how to adapt to the changes, ensuring they meet legal requirements without jeopardizing their operations or the interests of asset holders.
Monitoring similar legislative efforts across the country will also be crucial for understanding the broader implications of in-kind holding laws on the management of unclaimed digital assets. The success of Virginia’s approach could inspire further reforms, maintaining momentum towards more inclusive and comprehensive legislation surrounding digital assets in the United States.
As custodians and asset holders navigate this evolving landscape, the impact of House Bill 798 may well set important precedents for the future treatment of unclaimed digital property nationwide.