Binance Introduces Inheritance Feature for Crypto Assets

Binance founder and former CEO Changpeng “CZ” Zhao has called for crypto platforms to adopt a “will function” that enables users to distribute their digital assets in the event of death. Zhao highlighted the inevitability of mortality and the need for platforms to have mechanisms in place to ensure that users' assets can be transferred to designated accounts according to specified proportions. This call to action comes as Binance introduced a new emergency contact and inheritance feature as part of its June 12 update, allowing users to designate heirs who can claim their crypto assets if they pass away.

The update includes a feature that notifies a user’s emergency contact after prolonged inactivity, enabling the contact to initiate an inheritance claim. This development underscores the growing recognition within the crypto community of the importance of estate planning and the need for mechanisms to handle the distribution of digital assets after a user's death. The community has responded positively to Binance’s new feature, with users praising its thoughtfulness and highlighting the significant amount of crypto assets that go unclaimed each year due to a lack of proper mechanisms.

However, some community members have expressed concerns over the limitations of the current feature. One user noted that Binance accounts hold not just tokenized wealth but also intangible value, such as articles, social presence, and community influence. This user proposed the idea of transferring full accounts to heirs, similar to how phone numbers are passed down. Others echoed the need for proper inheritance planning in Web3, emphasizing that this is a reality that cannot be ignored and that it is a step toward true decentralization, providing users with the security of knowing their digital wealth can be passed on.

The need for a crypto will has been emphasized by legal experts as well. In 2023, a Dubai-based lawyer highlighted that many families are left unable to recover assets after a loved one’s death, urging holders to discuss their crypto and formally include it in estate planning. The lawyer noted that most crypto investors fall between the ages of 27 and 42, a group unlikely to prioritize end-of-life financial arrangements. However, preparing a will is considered the minimum step investors should take. It is crucial for wills to include detailed, technical instructions on accessing digital assets, not just their existence.

Zhao's suggestion and Binance's new feature reflect a broader discussion on the need for crypto platforms to prepare for the inevitable and protect users' assets in the long term. The 'will function' would serve as a safeguard, ensuring that digital assets are not lost or inaccessible to heirs, and would provide users with peace of mind knowing that their assets will be distributed according to their wishes. This initiative highlights the growing need for estate planning solutions in the crypto space, as more individuals and institutions adopt digital currencies as part of their investment portfolios.