What does Virginia’s new crypto law actually do?

The Virginia law requires crypto exchanges and custodians to transfer dormant digital assets to the state after five years of inactivity. Importantly, assets must be transferred in-kind, meaning in their original token form, not converted to cash. This updates traditional unclaimed property rules for crypto.

When does the Virginia crypto unclaimed property law take effect?

The law takes effect on July 1, 2026. This gives exchanges and custodians a short window to update systems and ensure compliance. Firms operating in Virginia will need to prepare operational changes quickly.

What counts as “abandoned” crypto under this law?

Crypto is considered abandoned after five years of inactivity in an account. Any activity, such as logging in, trading, or contacting the platform, resets the clock. This means long-term holders need to show occasional activity to avoid classification.

Why is in-kind transfer important for crypto holders?

In-kind transfer means the state receives the actual crypto asset, not its cash equivalent. This avoids forced selling during market downturns. It helps preserve potential upside if prices recover.

What happens to crypto after it is transferred to the state?

The state must hold the crypto for at least one year before selling it. During that time, owners can reclaim their assets or their value. This creates a buffer period to recover funds without immediate liquidation.

What did Coinbase say about the law?

Coinbase Chief Legal Officer Paul Grewal called the law “good news.” He highlighted that it prevents immediate liquidation and modernises outdated property rules. This suggests some industry support for the approach.

How does this affect crypto exchanges and custodians?

Exchanges must build systems to transfer crypto directly to state authorities. If they control private keys, they must deliver the assets; if not, they must retain them until transfer is possible. This adds operational complexity and compliance costs.

Does this law apply to self-custodied crypto wallets?

No, self-custodied assets are not affected. If users hold their own private keys in non-custodial wallets, the state cannot claim those assets. This reinforces the importance of self-custody for full control.

Virginia mandates in-kind crypto transfers for dormant assets

Written by Jon CuthbertPublished Apr. 16 2026Last Updated Apr. 16 2026

The US state of Virginia has enacted a new law requiring crypto custodians to transfer dormant digital assets to the state in their original token form rather than converting them to cash.

Governor Abigail Spanberger signed House Bill 798 on April 13, with the law set to take effect on July 1, 2026, giving exchanges limited time to implement compliance changes.

The legislation requires assets in inactive accounts to be treated as abandoned after five years, though any user activity resets the dormancy period.

Under the framework, custodians must transfer the crypto itself if they control the private keys, while partial-key holders must retain the asset until a full transfer is possible.

“Good news,”

Said Paul Grewal, noting the law avoids forced liquidation and updates existing property rules for digital assets.

Once transferred, the state must hold the crypto for at least one year before any sale, allowing owners time to reclaim either the asset or its value.

The law highlights growing efforts by US states to adapt unclaimed property rules to crypto, while reinforcing that self-custody remains outside the scope of such regulations.