Virginia has joined a growing list of states taking a more deliberate approach to dormant digital assets, with Gov. Abigail Spanberger signing legislation that gives crypto holders something they’ve rarely had from state governments: a meaningful buffer before anything happens to their coins.
Spanberger signed House Bill 798 into law on Monday, according to the state’s legislative website. The law takes effect July 1, 2026, and updates Virginia’s unclaimed property statute to explicitly cover digital assets, closing a gap that has left crypto holders in an awkward gray zone for years.
You snooze you lose
Under the new framework, crypto sitting idle in customer accounts for five years will be transferred to state custody. But here’s the part that actually matters: the state is required to hold those assets in their original form, actual tokens, not a cash equivalent, for at least one year before any liquidation is considered.
Paul Grewal, chief legal officer at Coinbase, was quick to welcome the development. “Some good news out of Virginia,” he wrote on X Tuesday. “The law updates the state’s unclaimed property statute to cover digital assets and ensures they are escheated in-kind. Thank you, Virginia.” The in-kind requirement addresses a problem that has quietly burned crypto holders in states without clear rules.
Why ‘in-kind’ is the whole point
Historically, when dormant crypto got transferred to state custody, administrators would often liquidate it immediately, or soon after. If Bitcoin happened to be in a downturn when that happened, the owner who eventually came forward to reclaim their property would receive the cash value at whatever price the state sold it for, not the value at the time of the claim.
In a market that can move 30 percent, 40 percent or more in a single year, that distinction is enormous. Virginia’s one-year holding requirement before any potential sale gives owners a meaningful runway to come forward.
It won’t eliminate the risk of being liquidated at a bad price, if a year passes with no claimant, the state could still convert, but it’s a significantly better posture than states that liquidate upon custody transfer.
The bill also lays down a broad definition of “digital assets” as digital representations of value used as a medium of exchange, a unit of account, or a store of value. Importantly, it carves out non-cashable merchant rewards, platform-specific in-game items, and certain regulated securities, so the scope is deliberately focused on genuine financial assets rather than sweeping in loyalty points or gaming tokens.
Virginia’s move follows California, which signed its own unclaimed crypto legislation in October 2025. Under California’s SB 822, digital assets left dormant on custodial platforms for three years must be transferred to state custody in their original form, with the state holding the assets through a licensed custodian before any liquidation window opens between 18 and 20 months after the asset is reported.
It was a notably crypto-friendly approach, and at the time, Grewal praised that one too, highlighting the contrast with states that still convert assets to dollars at transfer. The difference between the two states is worth noting.
California’s trigger is three years of inactivity, Virginia’s is five. California’s in-kind holding window runs 18 to 20 months. Virginia mandates at least one year. Both, however, share the core principle: the state should not immediately sell what it receives. That alignment suggests a broader consensus may be forming among state legislatures, even if the specific timelines vary.
States like Illinois and Delaware have taken the opposite approach, requiring abandoned digital assets to be liquidated and converted to cash before transfer to state custody. For a holder who went quiet during a market dip, that model may mean permanently missing a recovery. Virginia and California’s frameworks at least preserve the possibility.
The trend matters beyond any single state. As crypto adoption grows, more assets are likely to end up sitting inactive, in exchange accounts of deceased users, lost-access wallets, or simply holders who forgot smaller positions.
Without clear statutory frameworks, those assets either fall into legal limbo or get handled inconsistently, depending on how individual custodians interpret existing unclaimed property law. HB 798 removes that ambiguity for Virginians, and gives the industry another data point to point to as it pushes for similar standards nationally.