Finance Top Stories
GBO_crypto-image

What happens to cryptocurrency when you die?

Currently most known wallets do not have the option of assigning a nominee.

With the added popularity of NFTs, crypto assets have reached an unprecedented level of adoption in recent times with the market capitalization crossing $3 million in 2021.

While this asset class gives ever more independence from third parties and institutional authorities, there is a vital missing feature when compared to traditional financial assets.

Debt, equities, and bonds can all be transferred to your progeny or chosen nominees on account of your death as they can be designated as your nominees. But in the case of crypto, there is no prevalent system of declaring your nominee. So, in the absence of careful planning, crypto-assets like Bitcoin or NFTs can be of no value to the owner’s next of kin in case of an unfortunate eventuality.

The fact that crypto-assets are not backed by institutional authorities like the central bank of a country or any sovereign government makes it harder for an arrangement of assigning nominees that is readily available with traditional financial products. Most used crypto exchanges, from where most retail investors invest in these assets, also do not give this option.

So, the only way one can ensure that their hard-earned money invested in cryptos is restored post-death for their loved ones is to mention the specifics in their legal will or leave clear instructions for their near and dear ones.

If cryptos of a deceased person are kept in a digital wallet, then the designated beneficiary has to contact the wallets with the required documentation to prove their claim.

The latter is applicable even more for crypto assets stored offline in cold wallets. There needs to be clear documentation regarding how the beneficiary can access the physical storage device and also the pin code for accessing the cold wallet electronically.

Related posts

Dubai-based ABV closes $25 mn funding to support startups

GBO Correspondent

Meiji Yasuda Life Insurance to trim down holdings in foreign bond investments

GBO Correspondent

DP World prepares for the worst as pandemic hits business

GBO Correspondent