How Wyoming got tasked with returning $270M to crypto customers around the world

A dire warning landed in the inboxes of many international Coinbase customers last year: Unless they “immediately” removed their assets from the cryptocurrency trading platform, the company would sell off their holdings and turn the proceeds over to the state of Wyoming.

“At that point,” the email advised, “your sole recourse to reclaim your liquidated assets will be to contact that government agency and file a claim for the property.”

The message appeared to have come from Coinbase itself. But in a crypto space that’s rife with scammers, the idea that customers in places like Venezuela, South Africa and Kazakhstan were at risk of having their assets sent to “the U.S. State of Wyoming’s Unclaimed Property Administration” was met with skepticism.

When one of the message’s recipients turned to Reddit for advice in April 2024, a couple commenters suggested they were being played.

“It actually looks like you received a spoof email. Don’t reply,” advised one Redditor.

Another wondered aloud if the whole thread was “FUD,” or negative misinformation, that a rival exchange had planted to sway customers away from Coinbase.

The cryptocurrency giant was itself accused of giving mixed messages, too. One frustrated customer later complained that, when they asked a member of Coinbase’s support team about the looming sell-off and transfer to Wyoming, the representative “assured me that the email was a scam” and that “they had never heard of such a situation.”

But, in fact, the message was real. 

Not long after issuing those final warnings in the spring of 2024, Coinbase closed perhaps a quarter-million customer accounts across 139 different countries and sold off the bitcoin and various other cryptocurrencies those users had stored on the platform. Then, acting through a newly formed Wyoming corporation, the company took the roughly $270 million worth of proceeds and sent them to the state government.

“You think you’ve seen it all,” said Jeff Robertson who leads the State Treasurer’s Office’s Unclaimed Property Division, “and then all of a sudden, something new comes along.”

The state’s unclaimed property fund “basically tripled overnight” as a result of the foreign cash from Coinbase, Robertson said. The division’s workload ballooned, too, as it became the state’s responsibility to hold the cash and return it to Coinbase’s former customers. Queries and claims poured in from around the globe, swamping the seven-person office, slowing processing times and putting outreach efforts to Wyomingites on hold.

Over a year later, “we are working our way back to quote-unquote ‘normalcy,’” Robertson said. 

Meanwhile, upwards of $230 million from Coinbase continues to sit in the state’s unclaimed property fund, waiting for the rightful owners or heirs to step forward and prove their claim. The state government can never spend the money, but it can use the interest generated by the cash. And given how much money has not been and likely will never be claimed, Wyoming stands to make tens of millions of dollars over the coming years.

In a December discussion with state lawmakers, Treasurer Curt Meier cited the potential profits as evidence that accepting the money from Coinbase was a good decision. But some lawmakers and others have expressed concern about the challenges and liability the state may have accepted alongside the international customers’ cash.

“I don’t envy the position that Wyoming is in at all,” said Jennifer Borden, a Boston-based attorney who specializes in unclaimed property issues. “… I think you get there with the best of intentions, but end up with quite a bit of a problem on your hands.”

The ‘inherent conflict’ of unclaimed property

Coinbase runs the largest U.S.-based platform for buying and selling cryptocurrencies and operates in scores of countries. It currently holds some $425 billion worth of assets and previously claimed to have over 100 million “verified users.”

Coinbase’s communications team didn’t respond to emailed questions for this story, leaving it unclear as to what exactly prompted the company to purge some international customers in 2023 and early 2024. However, company messages and personal anecdotes shared online indicate Coinbase targeted customers who hadn’t sufficiently proven their identities. The company’s standard notice said it was “discontinuing all services to accounts that no longer meet our updated requirements.”

The accounts in question fell under the umbrella of a foreign subsidiary, Coinbase Kenya Ascending Markets, Ltd. Coinbase then, according to messages received by customers and posted to social media, moved to close that Nairobi-based company, sell off the impacted customers’ crypto holdings and “escheat” the proceeds — that is, to turn all of the cash over to a U.S. state as abandoned/unclaimed property.

Coinbase and other crypto companies came under intense scrutiny during the Biden administration, and Borden noted there’s been “so much uncertainty” as to how the Securities and Exchange Commission will regulate the space. “So maybe it seemed like the better course of action was … ‘When in doubt, escheat,’” she said.

Unclaimed property programs offer citizens a streamlined way to reclaim items like long forgotten utility deposits or retirement accounts, but they also help companies clear stagnant accounts off their books and provide states with another source of revenue.

Some states take the assets for themselves after a certain period of time and spend the money on government projects. Ohio, for example, plans to spend $600 million worth of unclaimed property to build a new football stadium for the Cleveland Browns.

That Wyoming only uses the interest from its holdings “is actually very admirable,” Borden said. She notes there’s an “inherent conflict” within unclaimed property programs when they serve as a source of state revenue.

“You get the property in as a safe keeper, but now all of a sudden you have an incentive to get more of it in and maybe to get less of it out,” Borden said, “because the more you have in, the more you have to play with.”

In this case, however, there was some apparent unease about taking on Coinbase’s foreign crypto proceeds and the task of finding the out-of-country owners.

“Many states were intimidated by the amount of money — you know, concerned about the ability to process that amount of claims, that sort of thing,” Deputy Treasurer Dawn Williams later told the Wyoming Legislature’s Joint Appropriations Committee.

From chatting with unclaimed property administrators in other states, Borden said her impression is that when it comes to crypto, “people realized there was a lot at stake and so much unknown that it might make sense to proceed with caution.”

Searching for a landing spot 

Coinbase is domiciled in Delaware, a state that’s accustomed to receiving large amounts of abandoned property from the more than 2 million entities incorporated in the state. In the past fiscal year, Delaware received $654.4 million in cash alone, said State Escheator Brenda Mayrack.

Unlike other states, Delaware immediately plugs that money into its budget as revenue — with the caveat that the state remains on the hook for paying any owners who come forward in the future. The state paid out nearly 16,000 claims and almost $200 million in the 2024-25 fiscal year, Mayrack said, and still netted several hundred million dollars.

Despite having a reputation for aggressively pursuing unclaimed property, Delaware declined to take the cash from Coinbase Kenya. When asked why the office turned the company away, Mayrack said confidentiality provisions in the Delaware Code prevented her from responding. 

As Coinbase prepared to sell off the assets, Mayrack recommended a series of changes to the state’s unclaimed property law, including some that may have hinted at the office’s concerns. For example, the legislation increased the requirements a company must meet before turning over foreign assets and clarified that the escheator can refuse to accept any property that’s reported “early” — that is, before it’s legally considered to be abandoned. Those changes and others within the “housekeeping bill” seemingly applied to the situation with Coinbase Kenya.

Meanwhile, with Delaware out of the picture, Coinbase’s legal representatives approached the Wyoming State Treasurer’s Office about accepting the assets instead.

Wyoming is the second-most popular place to incorporate behind Delaware. It has no corporate income tax and has long worked to become a digital asset hub, drawing the praise of Coinbase CEO Brian Armstrong. But it’s unclear what led the company to consider Wyoming as an alternative landing spot for the millions of dollars worth of crypto.

“Basically, they just checked with us to verify that, if they did this [transfer], we wouldn’t deny it,” Robertson said.

The treasurer’s office and its legal counsel reviewed the law and past precedent and concluded there was no reason to turn away Coinbase, Robertson said. 

“It’s just how we’ve always treated all businesses,” he said.

Wyoming’s rules say a customer’s property generally must be dormant for at least five years before their cash or virtual currencies can be designated as abandoned property. However, the law also provides the treasurer’s office with the flexibility to accept property sooner.

“Any time a business closes its doors, goes out of business, we pretty much always allow them to report early,” Robertson said, as it’s simpler to let a defunct company close out their books.

Given that Coinbase was shuttering its subsidiary and reported doing its due diligence in notifying the impacted customers, “we gave them permission to report and send everything to Wyoming early,” Robertson said. The state directs holders to liquidate cryptocurrencies — that is, convert them to cash — before reporting the property to the state, he added.

Coinbase sold off the impacted customers’ crypto in May 2024, apparently paying a tax to the Kenyan government along the way. The proceeds wound up with a newly formed affiliate in Wyoming, Crypto Services, Inc., which then transferred hundreds of millions of dollars to the state.

‘I JUST WANT TO ACCESS MY ACCOUNT’

Users’ experiences varied, but for one American customer in the United Arab Emirates, the sell-off capped a frustrating, six-month-long “nightmare.”

The customer, who asked that WyoFile not publish his name due to privacy concerns, said he set up his account in 2017 after moving to Dubai. Believing Coinbase to be a more trustworthy exchange, he eventually stashed thousands of dollars worth of bitcoin, ether and other cryptocurrencies on the platform.

In November 2023, however, he received an email from another subsidiary, Coinbase Bermuda Services Limited, that said the company was shuttering his account for not meeting its “updated requirements.”

After receiving the notice, the man tried transferring his assets, but found a change in phone numbers had left him unable to log in. He reached out to Coinbase support for help, but kept getting looped through the same steps, emails he shared with WyoFile show. At the company’s request, he provided multiple copies of his identification documents from the U.S. and U.A.E., forwarded bank and utility statements, and took live selfies via a webcam to verify his identity.

None of it worked.

“I JUST WANT TO ACCESS MY ACCOUNT AND MY MONEY. THAT IS IT,” the man wrote in a late March 2024 message. He called the situation “insane and bordering on illegal,” noting he had a slew of documents to prove who he was.

He was still in contact with Coinbase and trying to get into his account when the company notified him that his account had been closed and his assets sent to Wyoming. The closure, Coinbase asserted in its boilerplate notice, was due in part to “Your failure to respond to Coinbase’s numerous recent communications concerning your account …”

Crypto companies like Coinbase hold themselves out as more inclusive alternatives to traditional financial institutions. But following his experience with Coinbase, the American said he’d never trust crypto over a bank again.

Others on social media said that they, too, had been actively checking their accounts or trying to meet Coinbase’s updated verification requirements when their assets were liquidated.

Over on Reddit, one customer in India acknowledged that Coinbase “repeatedly” sent emails telling him to remove his crypto from the platform and he hadn’t done it.

“So I made a very stupid mistake,” he wrote.

However, others said they assumed the messages were a scam, that the emails went into spam folders or that they’d received no notice.

One X user wrote that he “logged in as usual to suddenly having $0 funds. No email, no notification, nothing.” He called it “criminal.”

On the Coinbase subreddit, company representatives responded to complaints, but generally directed their former customers to the state of Wyoming.

“Please note, for any questions or issues, you’ll need to speak directly with the Wyoming Unclaimed Property Division,” read one response to an unhappy customer, “as we at Coinbase are unable to assist further with these funds.”

Speaking directly with Wyoming

On a typical Monday morning, Robertson would come into the office and find 15 to 20 emails in the unclaimed property division’s inbox. The messages would generally be from Wyomingites looking to reclaim property that had slipped through the cracks.

But when Robertson returned from one weekend in May 2024, he found about 550 emails awaiting a response. Some people were upset and some didn’t understand why their assets were being sent to Wyoming. They all were seeking answers about their money.

International callers also filled up the division’s phone lines and went to voicemail, which was a problem, because the office was unable to return international calls. Robertson said they stressed email as much as possible.

Though the pace later slowed, “I would say the first three to six months … my whole Monday [morning] was basically set going through, sorting through emails,” he recalled, “not just myself, but pretty much all of our [claims] staff.”

Staff members initially copied and pasted the non-English messages into Google Translate, wrote a response, then translated their replies into the sender’s native language. But that proved too laborious.

The division quickly worked with a vendor to modify the site’s chatbot, WYO-Erp (a play on Western lawman Wyatt Earp and Wyoming Unclaimed Property) so it could answer questions in other languages. That lifted some of the burden.

In a bit of good fortune, the division had just received legislative permission to add a seventh staffer. 

The amount of property turned over to the state has been on the rise for some time — from $9.46 million received in fiscal year 2020 to $16.3 million in 2023 — and the office planned to have the new hire proactively seek out Wyomingites and reunite them with their assets. But thanks to the massive transfer from Coinbase, the staffer who came on board in late July 2024 was immediately consumed by those claims.

Things have since returned to what Robertson describes as “a manageable level,” with the office having paid out roughly $35 million to former Coinbase customers. But at its peak, the office had somewhere between 2,500 and 3,500 pending claims, he said, which is close to triple what the division would see in a typical surge of activity. Without the additional staffer, he said the backlog “would have been even worse.”

The division had prided itself on a two- to three-week turnaround time, but the claims process started taking months. Those with more run-of-the-mill claims got buried in the queue, so the office periodically took breaks from the Coinbase customers to make sure Wyomingites got help, too.

“You know, we are a state agency,” Robertson said. “We’re supposed to serve the people of the state.”

“I don’t envy the position that Wyoming is in at all … I think you get there with the best of intentions, but end up with quite a bit of a problem on your hands.”

Attorney Jennifer Borden

Coinbase ultimately transferred over 1 million individual properties, which nearly equaled how many the office had on hand at the time. Each property represented a different type of cryptocurrency or digital asset a customer owned at the time of the sell-off. Amounts ranged from a few cents to fortunes, with 22 customers owed over $1 million, Robertson said.

There’s no easy way to suss out the exact number of customers from the massive dataset, but Robertson believes there were “easily” 200,000 people. All of the users were supposed to be international, though in going through the data provided by Coinbase, he said the office has identified a small number of claimants — less than 1% of the total — that appear to have been in the United States.

Only one has been located in Wyoming.

Complex legal questions

The unclaimed property division has a $1.9 million budget for the state’s current biennium, or two-year budget cycle, funded entirely by the interest generated from the abandoned cash.

In December, the division requested an additional $300,000, including $7,200 to add more languages to the WYO-Erp chatbot and $40,000 for a new fraud-detection system specifically tailored to foreign claims.

The bulk of the division’s supplemental budget request — around $228,000 — was to add its own attorney, and Deputy Treasurer Williams emphasized that it was not tied to the influx of funds from Coinbase. Legal issues related to unclaimed property had been “overwhelming” the treasurer’s general counsel for some time, Williams told lawmakers, as locating and verifying the rightful owners and preventing fraud can involve complex legal work. 

The Wyoming Legislature’s Joint Appropriations Committee included all of the additional funding in the supplemental budget bill, but the entire funding package ultimately failed last winter. Robertson said the treasurer’s office plans to resubmit the requests for the upcoming biennium.

The office does have a multi-part vetting process in place, and some Coinbase-related claims have been denied because of “too many things that don’t add up,” he said.

The FBI reached out with concerns about one individual who had roughly $50,000 worth of crypto on Coinbase’s platform, Robertson said, but so far, the bureau hasn’t moved to seize the money, and the person of interest hasn’t tried to claim it.

During the December discussion, several appropriations committee members wondered what costs and liabilities might accompany the cash from Coinbase.

Sen. Mike Gierau, D-Jackson, questioned how accepting the dollars fit into the office’s statutory role. He said it sounded like, “we saw an opportunity where we could get an investment vehicle while we parse this money.”

“We did look into whether or not this was allowed, what the liability would be …,” Williams responded, “and [we] determined that we were within our statutory authority to accept the funds.”

Unclaimed property disputes can lead to litigation — not only from property owners but other governments. Williams noted that Delaware got caught up in a decade-long legal battle over cash it received from MoneyGram.

The payment service company, which is incorporated in Delaware, had been giving that state all of its unclaimed money orders. However, Pennsylvania, Wyoming and 28 other states asserted the cash should go where the orders were purchased. The U.S. Supreme Court agreed in 2023, prompting Delaware to transfer $102 million from its coffers to the prevailing states.

The MoneyGram situation, Williams said, is “an example of how a company will say, ‘We’d rather just put this in one place than have to figure out which state all of this money belongs to.’

“So that’s kind of what happened with Coinbase,” she said.

When Delaware revised its abandoned property laws last year, it specified that holders must make a reasonable effort to comply with the applicable laws of any foreign jurisdictions before turning the property over to the state.

Additionally, Senate Bill 267 says Delaware can decline to take property that might “expose the state to a risk of litigation” and can refuse to indemnify companies that report early. Escheator Mayrack told lawmakers that the overall package of changes would “clarify and confirm” existing practices, improve efficiency “and reduce the state’s litigation risk and expenses.”

Borden, the unclaimed property attorney, said she’s glad some states are “tapping the brakes” when it comes to accepting foreign property.

“I wish they would put them on full stop, and let’s make sure we get this right before we do anything else,” she said. “I think there’s some people on Reddit who would agree with that.”

Wyoming’s decades-old law

The treasurer’s office has been urging the Wyoming Legislature to update the state’s unclaimed property law since well before the situation with Coinbase. Staff have made the case that the decades-old act needs to be modernized to address assets like cryptocurrencies, video game content and HSAs, simplify processes for owners and heirs and better protect confidentiality and security.

“There’s a number of things that would be nice to get updated and provide some clarity,” Robertson said. “But if that doesn’t happen, or until it happens, we can continue working business as usual.”

The Legislature hasn’t tackled the subject since the 2022 interim, when the corporations committee took up the topic but took no action. At the time, committee members expressed unease about endorsing a 138-page rewrite that was completed just days before the panel’s final meeting of the year.

Though some state officials may look at unclaimed property as a revenue source, “I think you’ve got potential constitutional issues; I think you’ve got potential traps for the unwary,” Sen. Charles Scott, R-Casper, said at the October 2022 hearing.

Sen. Cale Case, R-Lander, also expressed concern that owners or heirs who claim their property years later miss out on the interest payments or gains they would have received if they’d had it the entire time.

“That’s always bothered me about the unclaimed property program — is that people always give up the earnings or any accumulation [of value] and the state is earning money off of this,” Case said.

It can be a particular concern with stocks and volatile cryptocurrencies; the price of a bitcoin, for example, has risen from around $60,000 at the time of Coinbase’s sell-off to over $120,000 this month.

However, Sen. Ogden Driskill, R-Devils Tower, offered a different perspective at the 2022 meeting, sharing how pleased he’d been to recover property that belonged to his late mother.

“I wouldn’t dare ask for interest,” Driskill said. “I was just happy to have anything back.”

Among the Coinbase claimants, Robertson said his office has heard variations of both perspectives — those angered by the ordeal and those happy to have their cash back.

Mistiming the market

The former Coinbase customer in Dubai said he was able to reclaim his money from the state without any hiccups. But he remains deeply frustrated with Coinbase, in part because he’d planned to hold his crypto for the long term.

“When you see what the price of bitcoin is — at least right now, right? — it’s a bit maddening,” the man said. He added that, “If I could take them [Coinbase] to court, I would just love to do that.” 

Borden said most states have amended their laws to clarify that owners can only get back whatever value was turned over to the state and that holders — i.e. companies like Coinbase — remain liable for legal claims related to lost gains. She also believes it’s better for states to take custody of the actual property, like the crypto tokens, rather than converting them to cash.

Borden is currently representing a former Microsoft employee in South Africa whose company shares were deemed to be abandoned and then sold off by the state of Delaware in 2015. In her pending suit against the state, Colette Barff alleges she never abandoned her shares and that they shouldn’t have been turned over to or sold by Delaware officials. According to reporting by Spotlight Delaware, Barff contends the state should return her shares — currently worth nearly $2.2 million — rather than the roughly $200,000 they netted a decade ago.

It remains to be seen whether a judge will agree.

Borden said complying with unclear property statutes becomes “really complicated,” especially when dealing with assets that fluctuate in value and owners in other countries. Foreigners, she added, are generally unfamiliar with unclaimed property laws and may have unreliable mail service and/or spotty cell service.

In Borden’s view, “It’s like, if we can’t do a better job giving it back, then we just shouldn’t be taking it.”

Some former Coinbase customers have complained about Wyoming’s process.

“Frankly, it feels like they’re just putting me in a loop to avoid returning my investment,” one user wrote on the Coinbase subreddit in November.

However, Robertson said most claimants have been able to assemble the information they need to reclaim their cash.

In the early goings, “there were some challenges,” he acknowledged, but “I feel like we’ve progressed to a point where, for the most part, we can turn those [claims] around in a relatively reasonable timeframe.”

It’s been a learning experience, Robertson added, as the office went from handling five or 10 foreign claims in a year to fielding that many within a matter of hours. They’ve updated their procedures as they’ve learned, including by adding foreign wire payments (for a $6 fee) as an alternative to mailing out a check to claimants.

There’s some irony in the hurdles that the state faces in sending cash to former crypto owners, as one of the primary uses for blockchain technology is to enable cheaper, faster and more secure payments across the globe. Treasurer Meier has floated the possibility of offering payouts with the state’s new stable token — effectively a crypto-like digital dollar — but for now, that’s just an idea.

Millions staying with Wyoming

The unclaimed property division returned a significant chunk of the cash in the recently concluded fiscal year. In total, the office returned a record $42 million to 16,000 claimants, and Robertson estimates that more than 80% of those payouts were to former Coinbase customers. However, he noted that property is generally less likely to be claimed as time passes.

The bank fees and hassle of filing a claim mean the small dollar properties — of which there are many — are likely to stay with the state. And tens of millions of dollars came to the state with unidentifiable owners, Williams said last year, “so the chances of us being able to find those people are going to be slim-to-none as well.”

If half of the $270 million is ever paid out, “I would be surprised,” Robertson said.

The onus remains on Coinbase’s former customers to step forward and prove their claims, as the treasurer’s office isn’t planning any proactive outreach to foreign owners.

“We have enough owners within the state of Wyoming or former residents of Wyoming that we can’t do enough outreach with …,” Robertson said, noting the office still holds over $100 million that’s owed to current or former Wyomingites.

After generally being occupied with Coinbase-related claims over the past year, he expects the division will be able to resume its efforts to proactively seek out Wyoming owners in the coming months.

Overall, the Coinbase experience has made the office more efficient at reuniting rightful owners with their property, Robertson said, while the cash stands to yield revenue for the state.

Meier predicted last year that the state would wind up with somewhere around $130 million of the Coinbase cash earning interest in perpetuity. At a rate of 4%, that would yield about $5.2 million a year — a significant jump from the roughly $600,000 surplus that the division had recently been providing to the state. It wasn’t long ago, Robertson added, that the interest earnings were barely covering the division’s expenses.

“If I had the option of just going through this again, obviously some things we’d do a little bit differently,” he said, “but, you know, I’d have welcomed it with open arms again, too.”
To search for unclaimed property in Wyoming, visit mycash.wyo.gov.