The key distinction is between crypto assets held on an exchange and those stored in self-custodied wallets. While exchange-held assets may leave a trail through KYC records, bank statements or transaction history, self-custodied crypto can become effectively inaccessible if heirs are unaware of the wallet or do not have the required recovery information.
“Crypto inheritance raises two distinct questions: who is legally entitled to an asset, and whether it can actually be found and accessed,” said Sukant Dukhande, Senior Director – Legal, CoinSwitch, an Indian cryptocurrency platform and aggregator.
For assets held with a crypto-asset service provider, legal heirs may be able to approach the platform after establishing the investor’s death and their entitlement, subject to the platform’s procedures, documentation requirements and applicable laws.
Avinash Shekhar, Co-Founder and CEO of Pi42, an INR-margined and INR-denominated crypto futures and options trading platform, said exchange-held crypto can potentially be traced through KYC-linked accounts, bank statements or transaction records.
Vikas Gupta, Country Manager – India, Bybit, a centralised global cryptocurrency exchange, said assets held with a regulated crypto-asset service provider generally have an identifiable account and a process through which a claimant can approach the platform with the required documentation.
He added that such claims remain subject to the platform’s policies, KYC/AML requirements and applicable succession law.
The situation is different for self-custodied wallets, where the investor directly controls the private keys. The blockchain may continue to show that assets are held at a particular wallet address, but it does not by itself establish ownership or provide access to the funds.
“If the family does not know that the wallet exists, does not know the wallet address or cannot access the required private key/seed phrase, there may be no central intermediary that can recover the assets,” Gupta said.
Prateek Gupta, Head of Business at Mudrex, a cryptocurrency investing and trading platform, said legal recognition of crypto as property can help establish a claim in principle, but legal entitlement and actual access remain separate issues. He said even if heirs have succession documents, they could remain locked out if they do not know the exchange, wallet or private key involved.
What should crypto investors do for succession planning?
Experts recommend treating crypto inheritance as both a legal and an access-planning exercise.
A properly drafted Will can establish who should inherit the assets, while nominations available on exchanges can provide an additional route for the intended beneficiary. Investors should also maintain an updated and secure record of their crypto holdings, including the exchanges and wallets they use.
“The key is to maintain an updated record of platforms and wallets without compromising the security of private keys or seed phrases,” Dukhande said.
Shekhar similarly recommended combining a Will with a secure record of exchanges, wallets and access instructions, with sensitive credentials stored separately.
For self-custodied assets, however, simply writing down or sharing a seed phrase is not necessarily a safe solution. A seed phrase or private key can provide direct control over the crypto holdings, meaning anyone who obtains it could potentially move the assets.
“The biggest mistake is confusing legal inheritance with practical access,” Shekhar said. “Naming an heir without creating an access trail can leave assets stranded, while casually sharing seed phrases can expose the holdings to theft.”
Gupta said investors should instead separate succession intent from technical access. The existence and location of the assets should be documented, the intended beneficiary should be legally established, and sensitive recovery information should be protected and released only through a secure inheritance mechanism.
Why a nominee or heir’s name alone may not be enough
A common misconception is that naming a nominee or beneficiary automatically ensures that crypto assets will reach that person. Experts say this addresses only one part of the problem.
A Will can establish who is supposed to inherit an asset, but the family must also know that the asset exists and have a legitimate way to initiate the transfer or claim process. This becomes particularly important for self-custodied wallets, where there may be no platform that can reset a password or recover a private key.
“The biggest mistake investors make is treating crypto inheritance like updating a bank nominee form and considering the job done,” said Prateek Gupta.
At the same time, investors should avoid sharing passwords, PINs, two-factor authentication codes or seed phrases casually during their lifetime, as this could expose their holdings to theft.
The practical approach, according to the experts, is therefore to create an inheritance trail without creating an immediate security vulnerability: document the existence and location of the holdings, establish the intended beneficiary through appropriate legal documents, and put in place a secure mechanism for accessing sensitive information when required.
Crypto investors should also periodically review the arrangement as their wallets, exchanges and holdings change.
