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What happens to crypto when the owner dies?
Crypto inheritance is what happens to someone's crypto when they die. Whoever controls the private keys, or the account at a custodian, controls the coins; if nobody can find the keys or seed phrase to a self-custody wallet, nobody can move the coins, permanently.
What it means for you
In the US, the SEC's investor office notes that a lost private key means permanent loss of access, and that cold-wallet devices can be lost, damaged or stolen. For tax, the IRS generally sets an heir's basis at fair market value on the date of death, so the coins' value then, not what the holder paid, is the starting point for a later gain or loss.
How it works
A private key, once created, cannot be changed or replaced; a seed phrase can restore a wallet if a device or key is lost. With self-custody the holder alone controls these and is solely responsible for them, so access depends on someone finding them. With third-party custody, an exchange or custody provider manages and controls access to the keys. For US tax, an inherited asset's basis is generally its fair market value on the date of death, or on an alternate valuation date when one is used for an estate tax return; the Form 1099-DA instructions apply the normal decedent rules to digital assets.
Sources: SEC investor bulletin: Crypto Asset Custody Basics for Retail Investors, IRS: Gifts and inheritances FAQ, IRS: Instructions for Form 1099-DA · checked 4 October 2026
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Educational content, not financial advice. Written by hand and checked against the source named above. Something wrong? Tell us and we reply within two business days.