If Cryptocurrencies Become Mainstream in Australia, how will they be inherited?

Australia’s direct and positive approach to cryptocurrency legislation has established the nation as a growing market for Bitcoin and other cryptocurrencies. In addition to recognising Bitcoin as legal tender, the government are currently looking into implementing new rules on cryptocurrency exchanges which seek to curb money laundering and terrorism financing. Most recently, Australian Entrepreneur and CEO of the comparison website Finder, Fred Schebesta, has announced plans to build the first cryptocurrency bank of Australia.

If Bitcoin and other cryptocurrencies are going to become mainstream in the future, it is important to begin treating them in a similar way to traditional currencies and consider the way in which they can be passed on through inheritance.

The complicated issue of cryptocurrency inheritance was recently highlighted in a U.S. case, whereby a father of a deceased Bitcoin miner was unable to access his son’s account to claim back the value of his Bitcoins. It is further estimated that around $20 billion worth of Bitcoin has been lost, either due to negligence or death of the account holder. This statistic does not include the lost value of other cryptocurrencies.

There is currently no legislation regarding cryptocurrency inheritance. It has been suggested by various cryptocurrency news sources that account holders should write down their details and give them to their beneficiary. However, if this information is lost or stolen, their beneficiary will not be able to claim their inheritance. A safer method involves splitting access to funds between multiple trusted parties and requiring each of their signatures in order to gain access to the account.

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Szabo & Associates, Solicitors can offer expert advice on a wide range of legal matters, including contesting, making or updating a Will and preparing a Power of Attorney. Please call George Szabo on (02) 9281-5088 or fill in our online contact form.