Virginia Says 'Not Your Keys, Not Your Cash': Governor Draws Line Against State-Forced Crypto Liquidations

Virginia Governor Abigail Spanberger didn’t just sign a bill—she dropped a digital sovereignty mic. By enacting legislation that revises how the state handles unclaimed property, she’s ensuring dormant crypto won’t get yeeted into fiat oblivion the second someone forgets their password (or two-factor auth app). HB 798, spearheaded by Delegate C.E. Cliff Hayes Jr., carves out a legal lane for digital assets under the Virginia Disposition of Unclaimed Property Act, mandating that crypto in inactive accounts—deemed abandoned after five years of ghosting—must be preserved in its native form for at least a year before any state-initiated sale can even be whispered about.

The governor inked the bill on Monday, but don’t break out the Lambo financing calculator just yet—it won’t kick in until July 1, 2026, giving both the state and wayward hodlers a breather to prep for the new era of blockchain bureaucracy.

This move slots Virginia into a growing cohort of states waking up to the fact that selling someone’s Bitcoin for dollars behind their back is about as ethical as rug-pulling a DeFi project—except this one’s backed by legislation, not just a shady dev team. Forced liquidation doesn’t just erase potential gains (imagine dumping BTC pre-2021, then watching from the sidelines as it moons), it also slaps unsuspecting owners with surprise tax bills, courtesy of Uncle Sam’s capital gains radar. Now, at least, the state won’t be the one flipping the sell switch without consent.

The bill’s near-unanimous passage—96-2 in the House, a flawless 40-0 Senate sweep—suggests that even in the stodgy world of state legislatures, crypto custody is finally being treated like a first-class concern, not a punchline. Maybe lawmakers realized that treating Bitcoin like expired yogurt on a shelf isn’t the best long-term strategy.

Coinbase’s Chief Legal Officer, Paul Grewal, gave the nod on social media, calling it “good news” for blending digital assets into the state’s unclaimed property framework—specifically praising the “in-kind” escheatment provision. Translation: your BTC stays BTC, not some sad pile of USD that can’t even cover a single satoshi in 2030.

Paul Howard, senior director at crypto trading firm Wincent, told Decrypt the bill is a win for the industry, not just because it outlines a clear custody path for unclaimed assets, but because it draws a firm line between what the state can steward versus what it can seize. “It’s about State custody of unclaimed custodial assets, not State control of private assets,” he clarified—because last we checked, government-run mem pools weren’t exactly a thing. He also gave a thumbs-up to the five-year dormancy clock, calling it a “reasonable tenure” that could actually boost public trust in digital ownership. Bonus hope? That states learn from Germany’s cringe-worthy Bitcoin fire sale in July 2024, where clueless auction tactics tanked the market and left everyone wondering if the Bundesbank had ever heard of an OTC desk.

“Hopefully, this approach in the U.S. signals better engagement with OTC desks for these types of trades,” Howard said, diplomatically implying that future liquidations should involve professionals, not panic-button auctioneers.

Under the new law, if you’ve got full private key access, you’re on the hook to deliver dormant assets in their original crypto form. If your access is partial—say, you’re missing a recovery phrase or hardware wallet—the rule shifts: hold steady until full transfer capability returns. The state treasurer, meanwhile, is under a one