"This topic is something everyone usually avoids, but currently, people cannot live forever."
On June 19, Binance founder CZ responded to the emergency contact and heir designation features updated in Binance's latest version. This is not just a product update; it feels more like a long-overdue coming-of-age ceremony for the industry, forcing the entire crypto world to confront the oldest and most deliberately avoided question: when a crypto holder unexpectedly passes away, what will happen to his/her digital wealth?
According to a retrospective analysis report released by Chainalysis on June 15, it is estimated that globally, more than 3 million Bitcoins may have permanently gone silent due to the owner's death or loss of private keys, constituting a 'digital black hole' worth hundreds of billions of dollars.
CEX's 'First Ray of Light': Convenience and the inevitable compromise of centralization
According to the official announcement from Binance and evaluations from multiple KOLs on the X platform, its 'heir designation' feature allows users to pre-designate one or more beneficiaries. When the platform confirms that the original account holder has passed away through a specific process (such as long-term inactivity and the emergency contact submitting relevant legal documentation), it can initiate the asset transfer process to distribute the assets to the designated heirs according to the preset ratio.
"This is a necessary evil and a pragmatic advance," a spokesperson for the crypto asset management platform SafePal told Cointelegraph on June 17, "For the vast majority of users who lack professional technical knowledge, it is unrealistic to ask them to manage complex multi-signature wallets or mnemonic phrase shards. CEX provides a 'one-click' solution, which is the best balance between user education and market reality."
Renowned Bitcoin educator @BTC_Philosopher pointed out in a post on June 16: "Binance's solution is essentially a form of 'centralized trust'. You are giving the platform the final disposal rights to your assets, along with the authority to determine your 'death'. This goes against the core spirit of 'Not your keys, not your coins'. The risks of platform shutdown, theft, or erroneous judgments still exist."
A legal advisor from another leading exchange, Kraken, expressed cautious praise for Binance's attempt during an interview with Decrypt on June 18, but also mentioned: "Any such functionality must be built on extremely strict, transparent, and auditable verification processes, otherwise it could lead to huge legal disputes and moral hazards."
Self-custody's 'hardcore path': Technological sovereignty and high thresholds
In contrast to CEX's 'trust' approach, the self-custody domain has long been exploring technology-driven 'hardcore' solutions. The core idea is to shift trust from centralized entities to cryptography and decentralized protocols.
Mainstream solutions include:
Multi-signature (Multi-sig) wallets: For example, setting up a 2/3 multi-signature wallet and handing over three private keys to oneself, family, and lawyer. Asset transfers require at least two signatures, effectively preventing single points of failure. The crypto asset security company Casa emphasized in a blog post on June 14 that this remains the 'gold standard' for estate planning for institutions and high-net-worth individuals.
Social Recovery: A solution that Ethereum founder Vitalik Buterin has advocated for years. Users can designate a group of 'guardians' (which can be friends, family, or professional institutions), who can collectively authorize access to restore the account when the user loses the main key. Smart contract wallets like Argent have already implemented such functionalities.
Time Locks and 'Dead Man's Switch': Through smart contracts, it can be set that if there is no activity in the account within a specified time, specific transactions (like sending assets to the heir's address) will be automatically triggered.
These solutions maximize user sovereignty and the decentralized nature of assets, but their cognitive and operational thresholds are extremely high, posing a daunting challenge for ordinary investors. "We can't expect my 70-year-old mother to understand what Shamir Secret Sharing (SSS) is," a Reddit user wrote in a discussion in the CryptoCurrency section, "I would rather trust Coinbase or Binance; at least there's a customer service number to call."
Legal Labyrinth: When Platform Designation Meets Legal Will
CZ's thoughts touch on deeper legal issues: "Legal regulatory clauses should also allow minors to have accounts."
This proposal directly addresses the core of global financial regulation—KYC (Know Your Customer) and AML (Anti-Money Laundering) regulations. Allowing minors to have (even if they cannot trade) crypto accounts requires significant amendments to the existing legal framework.
The more core legal conflict lies in: which has higher validity, the 'designated heir' on the Binance platform or the legal will established by the user in the real world?
Alex Tan, a digital asset legal expert at Hogan Lovells in Singapore, stated on June 19 to The Wall Street Journal: "Currently, this CEX feature is legally closer to a 'beneficiary designation', akin to an insurance contract. In some jurisdictions, this designation can bypass complex probate procedures and take effect immediately. However, in other areas, if it conflicts with the legal will, the court may prioritize the will. It entirely depends on local inheritance laws and digital asset laws."
This means that even with Binance's functionality, a clear professional legal will outlining how to dispose of digital assets remains indispensable. Otherwise, protracted legal battles may erupt between family members or even between heirs and the platform.
Conclusion: A heavy step for an industry maturing
The launch of Binance's 'inheritance feature' signifies far more than just a product function. It marks that the crypto industry is shedding its early idealism and technological frenzy, beginning to seriously assume its social responsibility as a mainstream asset class.
When we discuss TPS, Layer 2, and the next hundredfold coins, topics like death, taxes, and intergenerational inheritance are also essential cornerstones for building a sustainable and trustworthy crypto ecosystem.
Regardless, when industry leaders begin to design solutions for users' 'ultimate risks', it itself is the clearest signal: crypto assets are genuinely reaching households and are ready to be passed down as a form of wealth.
