The Growing Relevance of Unclaimed Property Regimes for Cryptoassets
Cryptoassets are playing an increasingly important role in individuals’ wealth, both as investment assets and as instruments for transferring value. This trend raises concrete legal questions when these assets become dormant or inaccessible, particularly following the death of their holder, the loss of private keys, or the closure or insolvency of a cryptoasset exchange or custodial platform. In these situations, unclaimed property regimes play a central role, as they are specifically designed to govern the safekeeping, administration, and return of assets whose owners no longer come forward.
The Legal Status of Cryptoassets in Quebec and Their Potential Classification as Unclaimed Property
Under Quebec civil law, cryptoassets are generally classified as intangible personal property within the meaning of Article 899 of the Civil Code of Québec. They constitute neither legal tender nor money under federal monetary legislation and are therefore considered property (an asset) rather than currency. As such, cryptoassets may fall within the scope of the Unclaimed Property Act, R.S.Q., ch. B-5.1 (the “Act”) when they are held by a third party, such as a financial services provider or another registered intermediary, and no claim, transaction, or instruction has been made within a statutory period of three years from the date of the last action taken by the right holder. In such cases, the holder is required to surrender the asset or its value to the Minister of Revenue, who then acts as an administrator responsible for simple administration. The Minister may, in accordance with the Act, retain the asset in kind or liquidate it, subject to the owner’s right to claim the resulting value within the applicable three-year limitation period.
However, the Act and its regulations were designed primarily for traditional financial assets and contain no provisions specifically addressing the technological or economic characteristics unique to crypto-assets. The regime is explicitly focused on value rather than on the preservation of the property and grants the Minister broad discretionary power to liquidate the property when its nature or the circumstances so warrant. This design creates uncertainty as to whether crypto-assets would be retained in kind or converted into fiat currency upon their surrender, an uncertainty that has significant implications for the protection of owners’ property rights.
More generally, the Quebec regime views prolonged inactivity as a sign that the asset has lost all economic relevance to its owner. While this assumption may be relevant for traditional financial assets, it is less so for cryptoassets, where inactivity often reflects a deliberate long-term holding strategy aimed at preserving security, control, and value in a context of regulatory or market uncertainty. In this context, inactivity does not necessarily imply abandonment.
From Uncertainty to Reform: U.S. Unclaimed Property Law and the Virginia Reform
Until recently, most U.S. states applied unclaimed property regulatory frameworks that did not expressly address cryptoassets and relied on traditional categories ill-suited to decentralized digital assets. In practice, this often led to the automatic liquidation of digital assets upon their surrender to the state, thereby exposing owners to potential loss of value despite retaining a formal right to claim. In such cases, recovery is generally limited to the monetary value of the asset at the time of liquidation. If the asset subsequently increases in value, the owners cannot benefit from this appreciation, which can result in significant and, in effect, irreparable economic harm. These shortcomings paved the way for targeted reforms at the state level, notably Virginia’s recent legislative response.
In 2026, Virginia, through House Bill 798, amended its Disposition of Unclaimed Property Act, codified in Title 55.1, Chapter 25 of the Code of Virginia, to expressly include digital assets, define them, and establish a framework for their treatment as unclaimed property. This reform was adopted in response to the operational and legal difficulties encountered under the previous regime, which mandated liquidation upon deposit and did not account for the volatility and investment nature of digital assets. More specifically, the lack of explicit legal recognition exposed the administration to legal uncertainty, potential disputes regarding the appropriate legal classification of digital assets, inconsistencies with the holding practices of institutional intermediaries, and practical difficulties in enforcing the legal transfer of these assets to the state.
The Virginia legislature highlighted a fundamental problem. Although owners retained the right to claim unclaimed digital assets, this process limited recovery to a monetary equivalent determined at the time of liquidation. When a significant market appreciation occurred after liquidation, the owner bore the full economic loss, even though they had never relinquished ownership of the asset. This situation was increasingly viewed as incompatible with the protective purpose of unclaimed property law.
The amended law therefore introduced an intermediate solution. Digital assets are now transferred to the state and held in kind for a defined period of one year, during which no forced liquidation takes place. Only after this period may liquidation be considered. This model aims to strike a balance between administrative feasibility and better protection of owners’ rights, ensuring that temporary inactivity does not result in the irreversible loss of an asset’s economic potential.
Quebec’s Current Framework: Discretionary Liquidation and Persistent Uncertainty
Conversely, as noted above, Quebec law does not expressly recognize cryptoassets and provides for no mechanism for in-kind preservation. Cryptoassets falling within the scope of the law would therefore be managed according to the general rules applicable to intangible personal property. Although this framework allows the Minister to hold and administer the property, it also authorizes liquidation at the Minister’s discretion, based on considerations such as the nature of the property or administrative constraints.
This discretionary model creates uncertainty for both owners and custodians. Owners run the risk that a deliberate long-term holding strategy could be nullified solely on the grounds of inactivity, while custodians operate under vague compliance requirements when managing volatile assets that require specialized storage and key management infrastructure. As we saw in the pre-reform U.S. context, this uncertainty risks reproducing the same structural outcome: the conversion of cryptoassets into a state-selected monetary form, potentially depriving owners of future gains while leaving them with only a reduced monetary claim.
Strengthening the Protection of Cryptoasset Owners Under Quebec Law
Quebec currently finds itself in a situation comparable to that which preceded recent U.S. reforms. A targeted amendment to the Unclaimed Property Act could address these issues without compromising the Act’s fundamental objectives. In this regard, a comparative analysis with other jurisdictions, notably Virginia, provides a practical roadmap for identifying and implementing legislative solutions to the gaps observed in the Quebec regime. Such amendments could include the express recognition of cryptoassets as a distinct category of property under Section 3 of the Act, the introduction of temporary in-kind retention mechanisms, and a more nuanced approach to inactivity that reflects the realities of holding digital assets.
By drawing inspiration from legislative choices adopted in jurisdictions such as Virginia, Quebec could not only mitigate the risk of unjustified loss of value but also strengthen the legal certainty and administrative consistency of its regime. Such an approach would offer Quebec the opportunity to establish itself as a Canadian leader in the legal treatment of cryptoassets, at the intersection of property law, technological innovation, and asset protection.
