The unclaimed cryptocurrency issue has attracted a new focus after Binance founder Changpeng Zhao called for a crypto platform to integrate inheritance capabilities. Zhao, who led Binance until his resignation in 2023, said all exchanges need to implement “Will Function” to prevent losses of digital assets after the death of users. His comments increase evidence that an estimated $1 billion in cryptocurrency remains unclaimed annually due to inadequate real estate plans.
https://x.com/cz_binance/status/1935538282064134150
Zhao’s comments came as Binance deployed emergency contacts and inheritance tools. Launched in June 2025, the tool allows users to assign trusted contacts to initiate claims if their account is inactive. Zhao stressed that death is inevitable and that the platform must address the continuity of assets.
Binance introduces emergency contact system for inactive accounts
Binance added inheritance functionality to its user interface on June 12, 2025. This tool allows account owners to select emergency contacts. These contacts will receive an alert if they do not see activity for the time set in your primary account. Once a notification occurs, you can start a billing process to access your account’s digital holdings.
This system reflects efforts to tackle the lack of asset transfer procedures in decentralized finance. Most cryptocurrency exchanges do not allow users to name beneficiaries directly. Binance’s functionality is one of the first public tools in a massive exchange.
The measure also includes access regulations for authorized representatives. These individuals can check the status of their account owners, submit documents and begin the transfer process. This update is intended to prevent digital assets from permanently accessing.
Industry data reveals cryptocurrency losses of over $1 billion a year
According to industry estimates, ainvest It reports that more than $1 billion in cryptocurrency is not billed every year. The main cause is poor inheritance planning. Many users have failed to access their wallets, private keys, or credentials. Without this data, even close families cannot acquire assets.
Several well-known cases highlight this issue. For example, in 2018, a sudden death Gerald Cotten, Founder of Quadrigacx It left $190 million in cryptocurrency trapped in an inaccessible wallet. Other cases, despite their small value, continue to emerge annually in multiple jurisdictions.
Legal experts advise crypto holders to prepare real estate documents and avoid writing private keys directly in a will. Most wills are made public during probate, so doing so could expose your property to theft. Instead, the lawyer recommends individual technical instructions that are kept safely and referenced in the will.
Legal complexity adds to accessing the heir’s challenges
Cryptocurrency inheritance remains a legal gray area in many jurisdictions. Unlike traditional bank accounts, crypto-holdings do not comply with the unified real estate law. In the United States, digital assets are usually treated as personal property, just like stocks and collectibles. However, the decentralized nature of blockchain makes it more difficult to enforce.
the study Spaggs Law It becomes clear that access often requires legal documentation and technical knowledge about what happens to cryptocurrency when we die. Some platforms, like Coinbase, require a death certificate, the will of the deceased, and government-issued identification before granting account access. Others may prohibit password sharing and may freeze your account if an access violation is detected.
Legal experts continue to warn that without a formal plan, families could face long-term court proceedings. There is also the risk of losing your digital assets completely if there is no recovery path. Dubai-based lawyer Irina Heber has previously warned that many heirs are unable to retrieve the code due to lack of preparation.
Multi-sig wallets and smart contracts as recovery tools
Real estate planners recommend using a Multisig wallet to share access across trustworthy parties. These wallets require multiple keys to approve transactions. By distributing keys to family members and advisors, owners can create controlled access routes.
Another option is to use smart contracts. These can be coded to release assets on validated events such as user death. These contracts provide automation, but require integration with legal documents to ensure validity.
Platforms and software tools now offer customized inheritance setups. Examples include Crypto Will Generators, Custodial Regensance Services, and a distributed escrow app. Cypherock X1 is one of the solutions that manage key distributions using encrypted backups. This includes property collection features that allow access by post-mortem verification candidates.
Digital identity and Web3 accounts complicate asset transfers
The inheritance problem simply goes beyond tokenized wealth. Web3 users often maintain non-transferable credentials tied to social identity, soulbound tokens (SBTs), and personal wallets. These digital footprints complicate inheritance as some cannot be reassigned or sold.
For example, Binance users pointed out that Web3 accounts with a large follower base are worthy of reputation. The user with 72,000 followers explained that their accounts have social weight as well as financial assets. These forms of intangible values are difficult to distribute using current legal and technical frameworks.
Experts warn that the will itself will include a private key. The probate court has publicly released the will, so the key may be stolen. Instead, it is recommended that users safely store their credentials and refer to them with sealed instructions. Wills also need to clearly name beneficiaries and match platform requirements. Some exchanges only respect claims if their will includes certain document criteria. Trusts can also be used to bypass probate and directly control the transfer of assets.
Calls increase for industry-wide adoption of inheritance features
Zhao’s proposal shows the broader driving force for the crypto sector to adopt industry-wide succession tools. Binance is the first major exchange to act, but other platforms may follow. The goal is to establish an asset continuity mechanism similar to that used in banks and insurance. Zhao also raised the question of how to deal with inheritances of minors. This requires legal guardianship procedures and regulatory adjustments.
Some jurisdictions may need to modify property laws to accommodate digital wealth. Traditional institutions have long offered asset transfer options through beneficiaries, trusts and insurance. In contrast, cryptocurrency platforms remain in the early stages offering similar protections. Without a formal infrastructure, users must rely on manual planning.
Legal practitioners note that crypto holders are often young, usually between 27 and 42 years old. Many people do not consider inheritance plans. Nevertheless, the complexity and value of crypto assets continue to increase, and planning becomes essential. The recent addition of platforms, such as Binance’s inheritance, represents an early step towards financial continuity in digital asset management.
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