Binance Adds Inheritance Feature to Prevent $1 Billion in Lost Crypto Assets

Binance has introduced an emergency contact and inheritance feature as part of its recent platform update on June 12. This new functionality allows users to designate emergency contacts who can submit inheritance applications when account holders become unable to access their funds. This development addresses the growing issue of cryptocurrency assets lost due to user deaths, providing a structured approach to asset recovery for surviving family members.

Cryptocurrency analyst Cryptobrave highlighted the urgency of this feature, noting that over $1 billion worth of crypto assets are inherited by centralized exchanges annually when users die in accidents. The analyst’s April post identified this as a growing problem requiring immediate industry attention.

Binance co-founder Yi He acknowledged the issue, stating that while the platform has a younger user base, which might reduce the number of deaths, Binance has had to handle cases where users died without leaving behind wills. These situations often involve complex family disputes over inheritance rights, necessitating preventive measures.

Binance’s Changpeng Zhao, commonly known as CZ, advocated for industry-wide adoption of ‘will functions.’ He emphasized that every cryptocurrency platform should incorporate such features to ensure that assets can be distributed to designated accounts according to specified proportions when a user is no longer around. CZ also called for regulatory support to enable minors to hold accounts with limitations on trading, allowing parents to send money to their children while ensuring protection.

This inheritance mechanism aims to resolve technical and legal issues associated with cryptocurrency estate planning. Current inheritance legislation often fails to account for digital assets, particularly when access to private keys or account data is lost upon death. Centralized exchanges can offer secure and legally compliant ways to recover assets after a user’s death, balancing security and accessibility. Exchanges must authenticate death certificates and clearly display inheritance hierarchies to prevent false claims.