Unclaimed cryptocurrency: US states are accelerating efforts to take control of dormant digital assets

Against this backdrop, companies in the digital asset space in the US must navigate an increasingly complex set of rules to comply with unclaimed property requirements while also balancing the risks that may arise from improperly remitting customer accounts to state treasuries.

States Are Expressly Applying Unclaimed Property Laws to Digital Assets

Every US state has an unclaimed property law that requires a “holder” of intangible assets to report and deliver “presumed abandoned” assets to the state treasury.¹ These laws are broad and apply to nearly any type of intangible asset or payable amount, including bank accounts, securities and investment accounts, and insurance proceeds, among many others. Assets subject to unclaimed property rules must be reported and remitted to the state treasury once the property is “presumed abandoned,” which may occur after a three-year period of customer inactivity, commonly referred to as “dormancy.”² 

Unclaimed property laws are custodial in nature; that is, the states take custody of the property on behalf of the rightful owner, who can submit a claim to the state to recover his or her assets. For intangible assets that remain unclaimed, states typically liquidate those assets shortly after receiving them.

As new forms of digital assets have emerged, states are updating their unclaimed property laws to apply to these new asset types, but they are not following a uniform approach. The language in the new statutes varies on issues such as the definition of “digital assets” (or “virtual currency”) and the concept of “holder.” But the key divergence is over how digital assets are to be delivered to the state.

States Divided on How to Deliver Digital Assets to the State

The key emerging divide involves the manner of delivering unclaimed digital assets to the state—specifically, whether holders may deliver them to a state-owned wallet at a state-approved custodian or whether holders must instead liquidate digital assets and remit US dollars. To bring digital asset accounts within unclaimed property laws, the initial wave of states required holders to liquidate customer digital assets and deliver the funds directly to the state treasuries in US dollars within 30 days of liquidation, as part of the state’s annual reporting cycle. This type of law has been enacted by more than a dozen states.

In contrast, more industry- (and investor-) friendly states are setting up processes for holders to remit digital assets in their native form to a state-owned account at an approved custodian. This approach seems to be gaining momentum. States including California, New York, and Oregon led the way with legislation to establish this approach, and the District of Columbia has set up a similar reporting process administratively. In 2026, six more states—Alabama, Alaska, Louisiana, Maine, Utah, and Virginia—have enacted bills allowing holders to escheat digital assets directly. This approach aligns the treatment of digital assets with that of other types of unclaimed investments, such as stocks and mutual funds, which are typically delivered in-kind to a state-owned custodial account. Note, however, that after the assets are delivered to a state-owned account, the state may itself liquidate them into cash, either immediately or after a holding period.

State Unclaimed Property Law Divide on Delivering Unclaimed Digital Assets

_{*This map reflects state statutes and official regulations as of June 30, 2026. Details vary by state. This map does not capture state practices, procedures, or interpretations in states without explicit statutory treatment.}

Notwithstanding the rush of legislative activity, many other states’ unclaimed property statutes still do not directly address digital assets, creating additional uncertainty in those jurisdictions. In states that do not directly address digital assets, at least some regulators have taken the position that digital assets are already subject to the state’s unclaimed property regime, based on preexisting law. Every state has an unclaimed property catchall provision covering all intangible property that is not specifically addressed, and the property is presumed abandoned three to five years after it becomes “payable or distributable.” Whether digital assets (and which ones) may fall within this catchall definition remains to be clarified.

Risks to Digital Asset Custodians and Owners from Unclaimed Property Laws

Whatever the method of escheatment—liquidation or delivery of digital assets in native form—each approach can pose substantial risks to actors in the digital asset landscape. Even when states accept assets in native form, many states liquidate non-dollar assets shortly after receipt, or at least within a few years. For other non-dollar assets, specifically securities, this practice can be controversial because it limits the amount the investor can recover on their assets. After the assets are liquidated, the state will pay only the cash proceeds, and the investor may miss out on any subsequent market gains. This dynamic has led to lawsuits against states for alleged unlawful takings and against companies for alleged “negligent escheat,” arguing that the company should not have reported the assets or should have made additional efforts to locate the rightful owner.

These issues can be particularly acute for digital assets, where asset values may experience large fluctuations within a short period of time. In response to this concern, some states are including in their unclaimed property laws a provision that the owner shall have “no recourse” against either a custodian who has liquidated the assets or against the state. But these provisions provide no comfort to investors whose accounts may be deemed inactive and swept into an unclaimed property process.

Key Takeaways

• A growing number of US states are now applying unclaimed property laws to digital assets, requiring “holders” to report and deliver inactive accounts to the state treasury after three to five years of account inactivity.
• Many states require holders to liquidate digital assets as part of the annual unclaimed property reporting process, while other states are taking steps to accept digital assets in their native form.
• The lack of legal clarity in many states creates uncertainty for how exchanges, financial institutions, and other holders of digital assets should structure their escheatment processes.

__________

If you have any questions about this Legal Briefing, please feel free to contact any of the attorneys listed or the Eversheds Sutherland attorney with whom you regularly work.

^{1 In most states, unclaimed property laws and regulations are administered by the state treasury department. In other states, the process is administered by the department of revenue or another agency.
2 Typically, logging in to an account is considered account activity for purposes of preventing an account from being deemed “unclaimed” under unclaimed property laws.}