Virginia Enacts Law to Protect Dormant Crypto from Forced Liquidation
- Virginia’s HB 798 extends unclaimed property rules to cover digital assets, effective July 1, 2026.
- The law mandates that dormant crypto be held in its original form for at least one year before any sale.
- Governor Abigail Spanberger signed the bill, which passed the House with a vote of 96-2 and the Senate unanimously at 40-0.
- Holders with partial key access must retain assets until a full transfer is possible.
- The bill prevents forced liquidation, which can lead to tax liabilities and loss of potential value increase.
The new legislation aligns Virginia with other states like California in protecting dormant digital assets from automatic conversion to cash, thereby preventing unintended financial consequences for asset holders. This move is seen as a positive step toward recognizing the value of digital assets and providing clarity on state custody versus control of private holdings.
By ensuring that dormant crypto remains in-kind for at least a year, Virginia aims to safeguard asset holders from unforeseen tax implications and potential loss due to market fluctuations. (Source)
