Virginia Governor Abigail Spanberger signed House Bill 798 into law on Monday, establishing a new framework for handling dormant cryptocurrency. The legislation, which takes effect July 1, 20CO, dictates that unclaimed digital assets must be held in-kind rather than liquidated immediately.
According to a report by www.theblock.co, the law applies to crypto assets in customer accounts that remain inactive for five years. Under this new mandate, the state will transfer these assets to state custody in their original token form.
Previously, state administrators often sold unclaimed crypto assets shortly after transfer. This practice frequently left original owners with cash proceeds tied to lower market prices at the time of the sale.
Preventing forced liquidation
The new bill requires the state to hold these digital assets for at least one year before any liquidation can occur. This provision aims to protect the value of the assets from sudden market volatility during the escheatment process.
Industry leaders have reacted positively to the legislative change. Paul Grewal, chief legal officer of Coinbase, expressed support for the move on X. "Some good news out of Virginia," Grewal wrote. "The law updates the state’s unclaimed property statute to cover digital assets and ensures they are escheated in-kind. Thank you, Virginia."
The legislation defines digital assets broadly as digital representations of value used for exchange, units of account, or stores of value. However, the law excludes certain items, such as in-game items limited to specific platforms and non-cashable merchant rewards.
Virginia joins other states like California in updating unclaimed property laws to include digital financial assets. The Block reports that California approved a similar bill in October to address the regulation of cryptocurrencies.
