Virginia Will No Longer Sell Off Abandoned Crypto

Did you know that many states will seize your crypto if you leave it untouched for too long?

It’s called escheat, and the same thing can happen to bank account balances and unspent gift card balances left untouched long enough to be considered abandoned.

It’s not exactly expropriation, as the states generally hold escheated funds for consumers to claim.

But in the case of crypto, states usually sell off the crypto upon receiving it and keep the fiat funds for owners to claim. Which means two things. One, you lose any potential upside as the price of cryptocurrencies rises over time.

And two, the sale may trigger a tax liability that the owner knows nothing about.

Now, Virginia has joined several other states, including California, in passing a law that mandates that escheated crypto be held in the form of the original digital assets. But plenty of others do sell digital assets off immediately.

Virginia Governor Abigail Spanberger signed the legislation, which requires unclaimed digital assets to be held “in-kind” for at least one year.

Coinbase Chief Legal Officer Paul Grewal called the bill’s passage “some good news out of Virginia” in an X post.

Digital assets will not be escheated if the owner of the account in which they are held uses or accesses that account in any way, including buying, selling, or simply visiting the account within the five-year period, or making any use of another account held by the same account provider.

In the event the digital asset holder — such as an exchange — cannot move the digital asset to the state’s control because they lack the private keys to move it, they must maintain it.

Escheat benefits the state, providing it with interest on funds held for their owners.