Virginia to hold dormant crypto ‘in-kind’ for at least one year under new law
The legislation stipulates that unclaimed crypto assets in customer accounts will be transferred to state custody in-kind.
Virginia has enacted new legislation requiring the state to hold unclaimed cryptocurrency assets "in-kind" for a minimum of one year. The law mandates that dormant crypto assets in customer accounts be transferred to state custody in their original digital form rather than being converted to cash, marking a significant shift in how states handle abandoned virtual currencies.
The legislation addresses the growing challenge of unclaimed digital assets as cryptocurrency adoption expands. Previously, many states either converted crypto to fiat currency immediately or struggled with establishing clear protocols for handling abandoned digital assets. Virginia's approach ensures that customers retain the potential to recover their original cryptocurrency holdings rather than receiving cash equivalents that may not reflect current market values.
This development could influence how other states approach unclaimed crypto asset management and may encourage more standardized regulatory frameworks across jurisdictions. The in-kind custody requirement protects consumers from potential losses due to crypto price appreciation during the dormancy period, while also acknowledging the unique nature of digital assets compared to traditional financial instruments.
Industry observers will likely monitor how Virginia implements the custody infrastructure needed to securely store various types of cryptocurrencies and whether other states adopt similar legislation. The law's practical application and any technical challenges that emerge could shape future regulatory approaches to unclaimed crypto assets nationwide.
Source: The Block
