What is escheatment?

It's basically where a company can declare your account to be abandon, they they transfer all assets to the state general fund. Normally this means things will get liquidated. This normally happens if nothing happens on the account for x amount of time. At which point it has to be declared abandon and steps have to be taken to turn it over to the state.

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Note this is a legal thing and not a company trying to screw you over thing. Many aeras have a law which forces companies to do this if conditions is met. If they don't, here is an example of actual what will happen in one area.

Failure to file this report and properly remit unclaimed property can result in interest charges, a $1,000 civil penalty for each day of delinquency, and a penalty equal to 25% of the value of the unreported property.

Normally, the person needs to just say they are alive and this prevents the account from being labeled as abandon. Note the laws in your area, and the policy of the company you are dealing with.

Each area and even each state in the USA can have different lengths of time until this happens. Here is a good link showing this for USA, but I suggest checking deeper. This will tell you what type of accounts have to follow this rule.

https://www.patriotsoftware.com/blog/payroll/what-is-escheat-law/

But again, each area might have it's own rules and it gets deep. For example https://www.lawserver.com/law/state/north-carolina/nc-laws/north_carolina_laws_chapter_116b_article_4 (NOTE: as far as I can tell, crypto does 100% fall within this)

But worldwide you should look into if your crypto trading account is at risk of this if pushed came.

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So, what can you do to protect yourself without worrying?

• Honestly, the easiest way to protect yourself is to transfer your crypto from an exchange and onto your own wallets. This is the easiest way since the crypto will be out of reach of anyone who could turn it over to the state.
• The next is to make sure your contact info stays up to date. In most places the rule is they have to send you a written letter letting you know. This giving you the chance of making sure the assets aren't claim as abandon.
• Ask if logging in is enough to show the account isn't abandon. You would just have to set some reminders to let you know to do x every so often.
• Make sure the account has a beneficiary tag to it. In most areas this slows down this process and they have to contact the beneficiary to make sure they have a chance at getting the assets.

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For those of you thinking this is a joke

Here is a Coinbase link which flat out tells you THEY WILL send your crypto to the state https://help.coinbase.com/en/coinbase/managing-my-account/other/escheatment-and-unclaimed-funds

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Note: this isn't financial or legal advice.