The rapid growth of cryptocurrency and its popularity has given rise to many questions, one of which is, if a user invests in digital currencies, what will happen upon his death?!! who will have access to the virtual wallet and how can his heirs benefit from his fortune?!!
If you are investing in the world of cryptocurrencies, you must ensure the safety of your funds, and their safe transfer after your departure from this life...or any other unexpected circumstance.
Cryptocurrency is stored using a virtual wallet and a special key is needed to open it. This private key is a string of random characters and is basically the password through which it can access the contents of the wallet. This is like a physical key to open a safe deposit box. But of course, the bank can eventually access this fund if the physical key is lost, but it's not the same as a wallet whose virtual key is lost.
The problem with the issue of inheriting virtual currencies is the absence of legal regulations in most countries, if it includes everyone, as it is difficult to transfer them to the heirs of the deceased owner of virtual currencies because cryptocurrencies do not have a tangible physical entity such as land, real estate, legal paper or metal money or even stocks, bonds, which are easy to sell through a regulated financial market under the supervision of the Capital Market Authority.
Actually, death is a sudden visitor. When someone dies, it is obvious that he leaves a legacy and heirs. In this case, the usual legal procedures are taken to obtain money, but the matter becomes complicated when it comes to the legacy of digital currencies.
Indeed, there have been many deaths that left behind considerable fortunes in Bitcoin or other cryptocurrencies, and this legacy has been lost from the hands of the heirs because of the loss of the password that only the owner was keeping for himself. For example, in 2018, Gerald Cotten, the founder of Canada's largest cryptocurrency exchange Quadriga, passed away. It was a great shock to his wife because the keys to private currency wallets, amounting to $250 million, were only in her husband's possession, and the wealth had gonna in the wind .
In addition, a Spanish media reported that the Bitcoin blogger and Romanian Billionaire Mircea Popescu, one of the world's biggest cryptocurrency owners, died in a drowning accident at the age of 41, and that his family couldn't access his 1 billion dollars worth of the bitcoins. Rumors reported that those coins landed on the market, others claimed that Mircea popescu was brilliant and he must have a certain plan for his virtual fortune . But no one knows where the truth lies.
In relation to these incidents and others , everyone was wondering what would happen to all these digital wealth after the death of their owners or their loss in one way or another. Death shook the whole crypto world and prompted specialists to reconsider the laws governing crypto investment operations. There had been plenty of discussions about creating measures that enable the recovery of lost digital cryptocurrencies .
There were two different points of views about the matter of cryptocurrency legacy . Some say that digital assets are like electronic accounts and e-mail, fall under the personal side, which ends with the end of a person's life, as they believe in the idea that "a person's right to be forgotten." on the other hand, there is another group that opposes this idea, as they protest by noting that this kind of privacy, applications, and uses of digital currencies are not related to the privacy of the deceased, but rather they are digital currencies with a financial right as a means of payment that can be exchanged against other currencies, and in return their condition is similar to the case of money and any financial receivables of the deceased that not associated with his personality.
The money will evaporate with the death of its owner. No matter how many people try to pass this money on to future generations, they will not succeed in hacking encrypted wallets because they are locked and well-backed.
Recently, a lot of intermediary techniques have emerged that undertake the task of executing the will of the deceased regarding his digital assets and possessions by distributing them to his heirs and friends according to the will he leaves.
There was created what is known as a "digital burial", meaning that all traces of the deceased person must be erased in the digital universe after distributing his property and digital assets to his heirs.
The digital burial can be done in two ways. The first case is when the person is still alive, and they make an agreement with an intermediary company that carries out such transactions and leaves all their digital passwords to the relevant companies. In this way, he could determine the fate of his accounts and maintain them after his death or allow messages to be sent on his behalf.
In the second case, family members who have the right to inherit after death file lawsuits in order to gain access to the accounts of the deceased. Then, they can apply to the companies related to the court decision.
Crypto assets may be safer than regular forms of assets, but they may also be a curse in the event of losing access to the digital wallet upon the death of the owner or other possible incidents, and for this the largest digital cryptocurrency exchange, coinbase, has developed the process of transferring virtual assets in the event of inheritance by providing a death certificate of the owner, joined with his last will, and many platforms have followed the same path to develop their systems in order to recover cryptocurrencies in any unfortunate circumstance as the cryptocurrency will of Coincover and BitGo.
In fact, the tool cryptocurrency will works through the two companies only as a custodian of the backup key, as the wallet is opened to recover the money in the event of the death of the owner, then, the investor’s potential heirs are granted a notice card bearing a special number to reach their wealth.
It became possible, then, to benefit from the digital currencies after the death of their owners and investing them as well , besides, digital platforms are still working on developing systems to make cryptocurrency assets recoverable in any emergency circumstances, though cryptocurrency companies have solved the dilemma, yet still there are further loopholes in the system.
To conclude, I think since our whole life becomes connected to the virtual world in its smallest details, and technology has affected all aspects of our livelihood, laws must be put in place to regulate our dealings with this virtual world, whether material or moral, taking into consideration the issue of cryptocurrency legacy .
It is inconceivable that Satoshi Nakamoto could have created cryptocurrencies without thinking about the consequences of the long-term future investments and the awkward circumstances that could emerge. Anyway , If those smart inventors did not think about this matter, then, safe ways must be found to preserve the rights of the investor, especially with all the emerging innovations and leading technology advancement ,of course, it will not be difficult to find resolutions to problems which are only human's handiwork. The need for new sophisticated programs becomes a necessity either in case of loss of keys or after the holder's death, because the latter worked hard, sacrificing time and strength to collect his largest funds which are supposed to end in his family's hands.
Thanks for taking time to read.
https://www.scmp.com/magazines/style/celebrity/article/3172722/what-really-happened-gerald-cotten-netflixs-new-true
https://trustwallet.com/blog/crypto-inheritance-how-to-make-sure
https://www.farrer.co.uk/news-and-insights/inheriting-cryptocurrency-estate-planning-top-tips/
https://trustandwill.com/learn/digital-inheritance
https://davidandersonpllc.com/can-cryptocurrency-be-inherited-in-an-estate/#:~:text=The%20Process%20of%20Inheriting%20Cryptocurrency&text=The%20executor%20of%20the%20estate%20will%20need%20to%20list%20the,transferred%20to%20the%20beneficiary%2Fbeneficiaries
