This advisory was first published by Tax Notes State on April 29, 2026 (the status of pending bills is as of April 29).
There has been a flurry of legislative activity as states explore and implement escheat frameworks for digital assets. States are tackling the question of whether digital assets, including virtual currency and cryptocurrency, are subject to escheat under state unclaimed property laws and have introduced legislation specifying (1) what type of property should be escheated and how that property is defined; (2) when that property should be reported; (3) what kind of due diligence notice is required; (4) how that property should be reported; and (5) what release of liability or indemnification is provided to holders that remit digital assets to the state.
Overview and High-Level Digital Asset Escheat Considerations
In the 2016 Revised Uniform Unclaimed Property Act (RUUPA), virtual currency was included in the definition of property. It was also separately defined as “a digital representation of value used as a medium of exchange, unit of account, or store of value, which does not have legal tender status recognized by the United States.” But RUUPA did not provide any escheat provisions specific to virtual currency (that is, no dormancy period, no due diligence requirements, no guidance on how the virtual currency should be remitted to the state, and so forth).
States have been left to fill the gaps left by RUUPA (or adopt their own non-RUUPA language for digital assets), introducing varied legislation controlling the escheat of digital assets.
The primary considerations are:
Defining virtual currency
Early bills, such as in Colorado, used the term “virtual currency,” which may have been because of the RUUPA language. But during the 2025 legislative sessions and certainly during the current sessions, we are increasingly seeing the term “digital assets” used instead (such as in Arizona), which is often defined to include virtual currency and cryptocurrency.
In-kind vs. pre-escheat liquidation
Initially, states such as Indiana appeared to favor requiring pre-escheat liquidation. However, given the particularly high volatility in value of digital assets, requiring liquidation before escheat of these assets creates significant risk for holders and states from owners that may lose out on material appreciation in value. And not all states provide for indemnification of holders or release of liability for a gain in value post-liquidation, which further puts holders in a tough position. For example, Connecticut’s statute is unclear if there is release of liability for any gain in value post-liquidation, but in Delaware, “The owner shall not have recourse against the holder or the State Escheator to recover any gain in value that occurs after the liquidation of the virtual currency.”
Now, states such as Arizona are adapting to these realities by requiring the escheat of digital assets in native form, rather than in liquidated form. This comes with its own challenges because states need to procure custodians that can accept the digital assets in-kind. Custodians may also be unable to accept the full range of digital assets, particularly the smaller coins. Under certain circumstances, states provide that they can still direct the holder to liquidate assets if the state cannot accept the digital asset in-kind; however, particularly in the case of lesser-traded virtual currencies, this raises the question of whether liquidating the virtual currency for escheat purposes would artificially distort the market, as well as the question of whether holders are indemnified for that state-directed liquidation.
Dormancy standards
Most states use a returned mail (RPO) standard tied to physical or electronic correspondence, or an owner inactivity standard. Many states that have an RPO standard include the inactivity standard as a backup in case the holder does not track nondelivery, or the holder does not regularly correspond with owners via physical or electronic mail (such as in California).
Using an inactivity standard with digital assets comes with risks similar to securities. If owners expect to purchase their digital assets and hold onto the digital asset as an investment for a long period (exceeding the state dormancy periods), mere inactivity may not be a good gauge of whether the owner is actually aware of their digital asset and affirmatively intends to hold the digital asset while it appreciates in value.
Due diligence requirements
Finally, some states have drafted provisions with specific due diligence requirements for digital assets—again, not unlike securities provisions. These requirements include mandates to send certified mail and inform owners that their digital assets may be liquidated if no response is received.
Legislation Related to Digital Assets
There is already substantial activity in the digital assets escheat legislative space this year.
Enacted bills, hot off the press
On March 26, Alabama HB104 was enacted. This bill requires property held in a digital asset account to be remitted in native form at the end of the dormancy period, though the administrator may direct the holder to liquidate (providing for release of liability for any appreciation or depreciation in the value of the property occurring after its liquidation). H.B. 104 also specifies that due diligence letters should advise owners that property may be liquidated.
On March 18, Utah Governor Spencer Cox signed H.B. 519, which updates existing provisions of Utah’s unclaimed property law to provide more details about the reporting and delivery of digital assets. Before the passage of this legislation, Utah included virtual currency in its definition of property as well as a definition of virtual currency, but did not provide any further detail on the escheat of virtual currency (in other words, the state had the standard RUUPA provisions). Utah requires delivery in native form (though the administrator can require liquidation).
On April 13, Virginia Governor Abigail Spanberger signed HB798, which requires escheat of property held within a digital asset account in native form—unless the administrator directs the holder to liquidate the digital asset before reporting. This is the first bill enacted in Virginia affecting the escheat of digital assets.
Also on April 13, Maine Governor Janet Mills signed Maine HP 1313 / LD 1969, which amends a number of the state’s existing RUUPA-based statutory provisions. In addition to the RUUPA-based statutory amendments, the bill requires the escheat of virtual currency in native form (unless the administrator directs the holder to liquidate the virtual currency before reporting). This is the first bill enacted in Maine that explicitly addresses the escheat of virtual currency.
Pending bills
- California AB 2335, which would establish a digital asset reserve fund to receive digital assets that are reported to the state (a bill to amend digital financial asset escheat provisions).
- Louisiana HB 1256, which would create a new escheatment regime for digital assets and require those assets to be reported in native form (current law has no digital asset escheat provisions).
Conclusion
We expect to see more states introduce bills governing digital assets, virtual currency, and cryptocurrency. We also expect these trends to continue: the shift away from using the term “virtual currency” in favor of “digital assets,” RPO dormancy triggers instead of mere inactivity, and the requirement to remit these assets in native form instead of liquidation. These trends are owner- and holder-friendly developments, though more details will be ironed out in these new digital asset escheat regimes. We will continue to monitor and advise on these exciting updates through the 2026 legislative session.
AlstonUP
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