Virginia Governor Signs Law Including Cryptocurrencies in Unclaimed Property Framework

Virginia updates unclaimed crypto law, requiring "in-kind" holding for one year before sale to protect owners.

Overview of New Virginia Legislation on Unclaimed Crypto

On Monday, Virginia Governor Abigail Spanberger signed House Bill 798 into law, updating the state's unclaimed property framework to include digital assets. This legislation addresses the unique nature of cryptocurrencies by requiring custodians to hold such assets in their original form and imposing a one-year holding period before any sale can occur.

Cryptocurrency Holdings and Sale Restrictions

The new law mandates that administrators must direct holders of unclaimed crypto to maintain these assets "in-kind," meaning they are not to be converted into cash until at least one year after the report is filed. This provision aims to protect cryptocurrency owners from potential losses due to forced sales during market downturns.

Legislative Context and Impact

Virginia's move aligns with a growing trend among states in incorporating digital assets into their unclaimed property laws. Other jurisdictions, such as Arizona and California, have already passed similar measures. The legislation not only clarifies the status of abandoned crypto accounts but also sets a five-year threshold for account dormancy.

Industry Reaction and Broader Implications

Paul Grewal, chief legal officer at Coinbase, welcomed the new law, stating it "updates the state's unclaimed property statute to cover digital assets and ensures they are escheated in-kind." This stance underscores the recognition of cryptocurrencies as legitimate forms of property deserving of protection.

Stakeholder Support and Future Outlook

The Virginia Blockchain Council hailed House Bill 798 as an "important step," highlighting its role in modernizing financial laws while demonstrating the state's commitment to emerging technologies. The council noted that such measures are crucial for fostering a favorable environment for innovation and investment within the blockchain sector.

Conclusion

Virginia’s new legislation represents a significant development in the ongoing integration of cryptocurrencies into traditional legal frameworks. As more states adopt similar approaches, this could pave the way for greater clarity and protection in the handling of unclaimed digital assets across jurisdictions.

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