Binance has launched a new inheritance feature aimed at helping users' families recover cryptocurrency after the account holder passes away. The update, introduced on June 12, allows users to set up emergency contacts who can apply for access to the deceased's account through an official application process.
This move targets the growing issue of digital assets becoming inaccessible due to unexpected deaths. According to cryptocurrency analyst Cryptobrave, $1.01 billion in digital assets is abandoned each year on centralized exchanges.
In a report published last April, the analyst emphasized that the industry needs to address this issue immediately.
According to Cryptobrave, it is estimated that about 200,000 Binance users accidentally die each year. With over 250 million users and $160 billion invested in the site, the average balance of each user is $640.
This implies that over one hundred twenty-eight million dollars in cryptocurrency is wasted each year in the accounts of deceased customers.
Although Binance co-founder Yi He is skeptical about the accuracy of the death court's estimates, she stated that the platform frequently handles inheritance cases. Most of these involve extreme family conflicts and the presentation of legal documents such as death certificates.
As she observed, the lack of a clear process would cause delays and confusion, and this new feature aims to eliminate those.
Binance Leads in Addressing the Issue of Dormant Digital Assets
Binance founder Changpeng Zhao has called on all cryptocurrency exchanges to introduce similar inheritance solutions. He emphasized the need for a 'will function' that allows for the distribution of assets according to the user's wishes.
CZ has also proposed creating child-friendly cryptocurrency accounts, where assets will be received but come with transaction restrictions.
The new system addresses ongoing legal and technical barriers to cryptocurrency inheritance. Most jurisdictions are not ready to present laws on digital assets for estate planning, especially in cases of lost private keys or login information.
This method introduced by Binance is a secure recovery approach with a centralized system that allows legitimate heirs to reclaim funds.
To limit abuse, the site will have to undergo a full identity verification and documentation process before disbursement. The aim is to prevent account manipulation and empower families with a clear recovery process.
By activating the inheritance feature, Binance is providing a solution for millions of inactive assets. This proactive step by the platform could drive changes across the industry in managing cryptocurrency assets after death.