Virginia HB 798: Crypto Exchanges Must Transfer Inactive Assets to State

Virginia Governor Abigail Spanberger signed House Bill 798 into law on April 13, 2026, officially integrating digital assets into the state’s unclaimed property framework. The legislation establishes a statutory process for handling cryptocurrencies and other digital assets that are presumed abandoned after five years of inactivity in customer wallets.

The law amends the Virginia Disposition of Unclaimed Property Act, treating digital assets similarly to traditional unclaimed financial property, such as uncashed checks or dormant bank accounts. Under the new rules, custodians—including cryptocurrency exchanges operating within the state—must transfer these dormant assets to state custody.

In-Kind Transfer Requirements

A central provision of House Bill 798 is the requirement that digital assets be transferred in kind. This means that custodians must turn over the original cryptocurrency tokens rather than converting them into their cash equivalent at the time of transfer.

This represents a significant shift from previous practices. Before the enactment of this law, Virginia administrators routinely liquidated unclaimed cryptocurrency assets immediately upon receiving them from custodians. In those instances, the state converted the assets into cash at the prevailing market price at the time of the sale.

The shift to in-kind transfers is intended to protect asset owners from forced sales during market downturns. Under the previous system, owners who later reclaimed their funds received only the cash value from the time of the state’s liquidation, which exposed them to the risk of missing potential gains during subsequent market increases.

State Custody and Liquidation Timeline

Once the digital assets are transferred to state control, the law mandates a waiting period before any potential sale can occur. The state must hold the assets in their original form for at least one year before an administrator can authorize any liquidation.

House Bill 798, which was introduced by Chief Patron C.E. Cliff Hayes Jr., is scheduled to take effect on July 1, 2026.

Industry Impact and Precedent

The legislation has drawn attention from industry participants, including the crypto exchange Coinbase and the Digital Chamber of Commerce. A spokesperson for the Digital Chamber of Commerce stated that the bill provides a clear legal framework for an issue that is only growing in importance.

Beyond the immediate impact on Virginia, the law may serve as a model for other U.S. States currently determining how to regulate unclaimed digital property. However, this could result in a complex patchwork of different state-level regulations for crypto custodians and exchanges to navigate.

Industry analysts suggest that such a fragmented regulatory environment across different states may increase operational complexity and compliance costs for exchanges and custodians operating nationally.