Virginia Passes Crypto Custody Law Requiring In-Kind Holdings

Virginia Governor Abigail Spanberger signed House Bill 798 on Monday, establishing new rules for how the state handles unclaimed cryptocurrency. The law requires digital assets to be transferred and held in their original form rather than immediately converted to cash—a protection that could preserve significant value for owners who eventually reclaim their holdings.

The legislation amends Virginia's Disposition of Unclaimed Property Act with two key provisions. First, custodians must transfer unclaimed crypto in-kind, keeping Bitcoin as Bitcoin and Ethereum as Ethereum. Second, the state must wait at least one year before selling any assets.

"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," the bill states.

Why In-Kind Custody Matters

The distinction between in-kind holding and immediate liquidation isn't academic. When states force quick sales of unclaimed crypto, owners who later surface often find their assets were dumped during market downturns—locking in losses that never needed to happen.

By holding assets in their original form, Virginia shifts the timing risk. If someone reclaims their forgotten Bitcoin during a bull market, they get the upside. The state also avoids becoming a forced seller during periods of market stress.

Coinbase Chief Legal Officer Paul Grewal called the signing "some good news out of Virginia," noting the law "ensures they are escheated in-kind."

Five-Year Abandonment Timeline

The bill also clarifies when crypto accounts become state property. Accounts go dormant after five years of inactivity unless owners show engagement—logging in, making transactions, or otherwise demonstrating awareness of their holdings.

Virginia joins a growing list of states bringing crypto under unclaimed property frameworks. Arizona passed similar legislation in May 2025, allowing the state to claim abandoned crypto after three years and place it in a state-managed reserve fund. California has also moved to include digital assets in its unclaimed property statutes.

The Virginia Blockchain Council previously endorsed HB 798, calling it "an important step" that "helps modernize Virginia's financial laws and signals the Commonwealth's continued engagement with emerging technologies."

For crypto holders with Virginia connections, the takeaway is straightforward: log into your accounts periodically. A single transaction or login resets the five-year clock and keeps your assets out of state hands.