There’ve been growing concerns in the crypto investment community about what happens to your crypto assets after you kick the bucket.
These concerns were sprouted as a result of the unexpected death of crypto investors and how they’re assets are lost forever in the blockchain.
Earlier this year, Ryan Klein had a near-death experience.
While cleaning out a gutter at his California home, the 32-year-old IT professional took a misstep and tumbled 10 feet off a ladder into a fortuitously placed wintergreen shrub.
Sprawled out on the ground, gazing up at the cerulean sky, a terrifying thought crossed his mind.
“I realized that my wife didn’t have access to my cryptocurrency,” he told The Hustle. “If I’d died that day, that money would’ve just disappeared.”
The following weekend, Klein took action: He wrote down his private keys and account passwords, typed up detailed instructions on how to access his holdings (~$77k worth of various coins), and entombed the information in a small safe in his closet.
Klein is one of a growing number of crypto investors who are beginning to give serious thought to the afterlife of their bitcoin.
Traditional investments (say, a savings account at a bank) are relatively easy to find, access, and delegate with a death certificate and other legal documentation.
But crypto poses some unique challenges.
In the case of the death of a crypto investor, only few things can happen to the crypto assets:
- If the deceased had a will, they’d be distributed to whomever he legally designated to be his/her successor(s).
- If the deceased didn’t have a will, a decedent (typically a spouse) would apply for probate, and then his state would’ve designated an administrator to dole them out according to a formula.
- The assets get lost forever if the private keys are not recovered.
The will stipulates who gets what, but usually does not include a complete list of the assets of the deceased. The job of the executor (the person appointed in the will or the court appointed) is to keep track of everything.
But however, in a survey of cryptocurrency investors conducted by The Hustle, nearly 40% of respondents stated that they have no plans to pass their cryptocurrency to their heirs.
“Cryptocurrency investors overwhelmingly tend to be male millennials who aren’t thinking about the next stages in life,” says Daniel Maegaard, a prolific 30-year-old crypto and NFT investor whom The Hustle profiled earlier this year. “Most are focused on immediate gratification.” via Hustle
Some individuals have a more security concern about the issue
Some like Maegaard, don’t feel comfortable sharing private keys with anyone — even family members and loved ones. “I’ve opted for maximum security, which means no one else has access to my crypto assets,” he says. “In the event of an accident, the crypto assets on my hardware wallets would be lost forever.” For Maegaard, whose assets are worth millions, the risk of exposing his private keys is greater than the risk of an untimely death.
The rise of crypto inheritance platforms
In recent years, a number of services have popped up offering crypto investors more secure alternatives for passing on digital assets:
- TrustVerse uses AI and private smart contracts to store keys and passwords.
- Safe Haven allows users to store private keys on the blockchain and set in place their own distribution parameters.
- Clocr has a digital safety vault that “shreds” passwords and distributes pieces of it to multiple locations.
- Casa splits up access between multiple keys stored on a separate devices that can be distributed to various trusted parties, so that no single person has the ability to access your crypto.
Casa CEO Nick Neuman told The Hustle that the platform’s “diamond”-level subscriptions, a $5,000/year plan, including inheritance agreements, almost doubled in the first six months of 2021.