Bitcoin Inheritance: The Unforeseen Problems
Five years ago, a 26-year-old Bitcoin miner named Matthew Moody died in a plane crash during an observational flight. His father Michael has been looking for a way to access his late son’s crypto wallet, hosted by blockchain.info, for the past three years without much success, Bloomberg reports.
Michael Moody has no way to access these funds without the private keys, or a special code needed to access the funds, and there is no way to find out even how much is in that wallet. Moody added that young people “need to be better educated about the steps needed to be taken to ensure their investments are properly secured, both for themselves and for future heirs.”
On the topic of how to pass down your cryptocurrency after death, Peter Henning, a professor at Wayne State University Law School and veteran SEC and Justice Department lawyer, said, “My bet is that ICOs [Initial Coin Offering], when issued by a company, they’re going to be considered securities. If they are securities, then just like stock or bonds you can put them in your will and pass them down.”
But this may be some time in coming. In the meantime, the crypto exchange CoinBase offers an alternative solution: the company asks for documents such as a death certificate and will in order to transfer the assets. But the idea of somebody else being in custody of your crypto is not in line with its idea of decentralization.
The problem of death through accident, like in Moody’s case, still remains. It is highly unlikely that someone in their 20s or 30s would have a will ready in case something happened to them - and even then, adding your crypto wallet keys to the will may slip your mind. This way, the keys are lost - perhaps forever.