Virginia to hold dormant crypto ‘in-kind’ for at least one year under new law

Virginia has enacted legislation requiring unclaimed cryptocurrency assets held in customer accounts to be transferred to state custody and held in-kind for a minimum of one year. This marks a significant regulatory development in how U.S. states handle dormant digital assets, treating crypto similarly to traditional unclaimed property while preserving its native form rather than converting it to fiat.

Virginia's new law represents a meaningful shift in how state governments approach cryptocurrency regulation and custodianship. By mandating in-kind holding of dormant crypto assets rather than forced liquidation or conversion to fiat currency, the legislation acknowledges the distinct nature of digital assets while establishing a framework for unclaimed property management that extends beyond traditional securities and bank deposits.

This development reflects broader regulatory maturation across U.S. states. Traditionally, unclaimed property laws required financial institutions to transfer inactive assets to state treasuries, often resulting in liquidation. Virginia's approach preserves the original asset form, which is particularly significant given crypto's price volatility and the potential loss of value or opportunity if assets were converted during unfavorable market conditions. The one-year holding period provides reasonable time for rightful owners to claim assets before state custody becomes permanent.

For cryptocurrency holders and industry participants, this law creates both opportunities and considerations. The in-kind holding requirement protects asset value and recognizes crypto's legitimate status within state treasury operations, potentially setting a precedent for other jurisdictions. However, it also establishes a new compliance obligation for financial institutions managing customer accounts, requiring clear policies for identifying and transferring dormant digital assets.

Looking forward, other states may adopt similar frameworks, creating a patchwork of crypto-specific unclaimed property regulations. This could drive industry standardization and encourage financial institutions to implement better account monitoring systems. The success of Virginia's implementation will likely influence whether other states embrace in-kind holding or develop alternative approaches to crypto asset management.

• →Virginia requires dormant cryptocurrency to be held in-kind rather than liquidated when transferred to state custody.
• →The one-year minimum holding period allows asset owners time to claim their crypto before permanent state ownership.
• →This law positions Virginia as a progressive state jurisdiction for cryptocurrency asset management and regulatory clarity.
• →Financial institutions must implement new compliance procedures to identify and transfer dormant digital assets appropriately.
• →Virginia's framework may establish a precedent for other states developing unclaimed property laws specific to cryptocurrency.