Cryptocurrency may feel like uncharted territory, but when it comes to unclaimed digital assets, the expectations are becoming clearer and more urgent. As more consumers hold crypto across exchanges, wallets, and custodial platforms, escheatment obligations are evolving to meet the moment.
At Eisen, we help financial institutions navigate complex compliance challenges with clarity and confidence. In this guide, we break down what escheatment for crypto means, how it differs from traditional asset classes, and how your organization can stay ahead of emerging regulations.
What Is Escheatment for Crypto?
Escheatment is the legal process of turning over unclaimed or abandoned property to the state after a defined period of inactivity. Traditionally, this has included financial accounts, securities, and uncashed checks. But in today’s digital economy, crypto assets - Bitcoin, Ethereum, stablecoins, tokenized deposits, and other blockchain-based instruments - are increasingly colliding with state unclaimed property laws.
These assets go by many names: digital assets, virtual currency, cryptocurrency, digital tokens. For escheatment purposes, states generally treat them the same. If the owner cannot be contacted and no qualifying activity occurs within the dormancy period, the asset may be considered abandoned.
What qualifies as unclaimed crypto? Common triggers include:
- Inactive or abandoned exchange accounts
- Lost access to custodial wallet platforms
- Unclaimed crypto held in bankruptcy estates
- Dormant balances left on fintech platforms
If there’s no verified customer contact or owner-initiated activity within a state’s dormancy period (typically 3 - 5 years), those assets may be deemed abandoned and subject to escheatment, regardless of the terminology used to describe them.
Why Crypto Escheatment Is So Complex
Crypto introduces operational and legal challenges that traditional escheatment frameworks were never designed to handle. Key complexities include:
Valuation volatility
Unlike fiat, crypto values fluctuate by the minute. Some states define a specific timing requirement for when to liquidate. Others expect “commercially reasonable” liquidation - but what that means in a 24/7 market is far less clear.
Lack of uniform guidance
Most unclaimed property laws predate digital assets. States like Delaware and Illinois have issued early guidance, but definitions, expectations, and reporting preferences vary widely.
Wallet custody and access
Crypto may be held in single-sig or multi-sig arrangements, custodial or non-custodial, in hot or cold wallets. Determining who actually controls the asset - and therefore who bears liability - is complex. Operationalizing escheatment across those environments is even harder.
Liquidation requirements
Many states require holders to liquidate crypto before remitting funds. This can create real challenges for:
- Stablecoins
- Wrapped assets
- Tokenized deposits
- Staked or locked tokens
- Illiquid or delisted assets
Tax treatment and reporting format
Liquidating crypto may create capital gains. And NAUPA reporting standards - built for fiat - don’t always map cleanly to blockchain-based addresses or token identifiers.
Taken together, these gaps make crypto escheatment one of the most challenging frontiers in modern compliance.
A Step-by-Step Look at Crypto Escheatment
If your platform, exchange, or custodial service handles crypto balances, here’s how to prepare for escheatment in a way that protects both your users and your business.
1. Identify Dormant Accounts
Define what “inactivity” looks like in your environment. Indicators often include:
- No user logins or wallet access
- Returned communications or bounced emails
- Unexecuted withdrawal attempts
- No trading, transfer, or staking activity
Align these triggers with state-specific dormancy periods to determine which accounts may qualify as unclaimed.
2. Initiate Due Diligence Outreach
Before reporting, most states require good-faith efforts to contact the asset owner:
- Send first-class mail or email notices (depending on the state)
- Provide clear instructions for reactivating the account
- Document all outreach attempts for audit readiness
Crypto users can be harder to reach - lost credentials, inactive emails, and anonymous accounts are common - making early, well-documented outreach particularly important.
3. Determine Liquidation Strategy
Because most states cannot accept crypto directly, liquidation into fiat is typically required. But liquidation introduces unique considerations:
- Which exchange rate or time-of-day price should you use?
- How do you document fair market value?
- What if the asset is illiquid, delisted, or only redeemable through protocol actions?
- What if tokens must be unstaked, unbonded, or redeemed before liquidation?
- How should dust, gas fees, airdrops, or other de minimis amounts be handled?
Partner with legal, finance, and operations to define a defensible, repeatable process.
4. Submit Your Report
Use each state’s unclaimed property portal to submit a NAUPA-formatted report. Most states do not yet support crypto-specific fields in their reporting systems, so precise documentation is essential. Some states have introduced new NAUPA codes for crypto; others require fallback codes.
Include:
- Liquidation value in USD
- Asset type and wallet or account identifiers
- Remittance method (ACH, check, etc.)
- Copies of due diligence notices
- Notes explaining asset-specific nuances
Because states are still developing their playbooks, expect more follow-up questions than usual during filing.
How Eisen Supports Crypto Escheatment with Confidence
Eisen helps financial institutions bridge the gap between outdated regulations and digital-asset realities. Our platform is built for scale, precision, and audit-grade readiness - whether you hold fiat, securities, or crypto.
- Escheatment Manager: Identify dormant crypto accounts, calculate eligibility, and generate accurate state reports - without manual spreadsheets or fragmented workflows.
- Disbursement Manager: Support compliant fiat remittance after crypto liquidation, complete with reconciliation flows and full audit trails.
- Outreach Manager: Maximize owner reunification with automated, compliant communications - well-suited for digital-first and hard-to-reach users.
The Road Ahead
As digital assets become a permanent fixture in the financial ecosystem, regulators are moving quickly to close the gaps. Proactively managing crypto escheatment isn’t just about staying compliant - it’s about protecting user trust, reducing operational risk, and preparing your business for what’s next.
Eisen holds exclusive partnership rights to support crypto escheatment at scale, giving you a trusted and forward-looking solution.
With Eisen, you don’t just keep up with regulation - you lead the way.
