Cryptocurrency鈥檚 next curveball: Why fintech leaders need to act now
Eight years after the initial surge in popularity, virtual currency is no longer an anomaly in the financial marketplace. As adoption grows and more financial institutions develop technology to accept it, states are also making moves to officially classify cryptocurrency funds as unclaimed property.
The state of the states: Who’s doing what?
Recent legislation is signaling that state treasurers recognize the money being left on the virtual table and are establishing guidelines for financial institutions to follow. Prior to these changes, most state unclaimed property statutes did not call out virtual currency by name; rather, the implication was that all abandoned funds should be turned over to remain compliant.
As is often the case, what the states ask for and what they’re prepared for can be different things; however, that is changing quickly. Here are four states leading the charge:
New York
- What changed: As of late 2022, New York officially classified virtual currency as reportable unclaimed property.
- Dormancy period: Five years
- Key requirement: Due diligence notifications mirror all other property types, including publication.
California
- What changed: Amended Senate Bill 822, signed into law in June 2025, modernized existing legislation to include “digital financial assets.”
- Dormancy period: Three years from the last owner's “indication of interest” or returned mail/email
- Key requirement: Holders must transfer the exact asset type and amount and can only liquidate if the controller declines custody.
Arizona
- What changed: As of May 2025, House Bill 2749 revised unclaimed property statutes to include and call out cryptocurrency as reportable. Additionally, the state created a Bitcoin and Digital Assets Reserve Fund.
- Dormancy period: Three years
- Key requirement: Holders must remit value, and airdrops/staking rewards must remain in the digital reserve.
North Dakota
- What changed: As of late April 2025, the state began formally recognizing virtual currency as reportable property.
- Dormancy period: Three years
- Key requirement: Virtual currency must be liquidated prior to remittance.
Why this matters to financial institutions
As states increase regulatory oversight, fintech compliance professionals will face the unique challenge of reconciling the technology required to be considered a custodian of virtual currency with the traditional formatting of unclaimed property regulatory reporting.
Data points like customer address, name and last contact date will need to be measurable, traceable and reportable. Most reporting jurisdictions will not be capable of receiving the virtual currency in its native state, which means institutions need to be prepared to identify, value and liquidate these assets within 30 days of reporting in most cases.
Traditional banking products have somewhat logical last activity dates; however, tracking activity in crypto wallets is much more complex. Are you tracking blockchain interactions without value movement? Do you have customer-controlled private keys but no platform access? Does your institution offer multiple product types, and if so, are your accounts linked?
What should you be doing now?
If your institution has exposure to virtual currency, now’s the time to get your compliance strategy in shape. Here’s how to start:
Review your policy:
- Help ensure your unclaimed property procedures reflect the inclusion of virtual currencies and include clear definitions of what you consider to be owner contact and how dormancy is measured.
Educate your team:
- Virtual currency compliance is new terrain. Compliance officers, legal teams and operations staff need clarity on how to treat these assets under current and upcoming laws.
- If your contact center or support staff handles customer questions, proper early on can prevent frustration and escalated complaints.
Get ahead of the curve:
- As more states move forward with legislative activities involving virtual currency escheatment, working with experienced professionals will help you prepare a solid offense and a healthy reporting history.
How Wipfli can help
Wipfli continues to stay abreast of the latest changes to help ensure compliance in all areas of unclaimed property. If your business needs updated policies and procedures, a compliance risk assessment or help with complying with unclaimed property laws, our team is ready to advise you on how best to proceed. Contact a state and local tax advisor today to learn more.
