- Binance launches emergency contact and inheritance features with the recent update.
- Analysts estimate 200,000 Binance users die yearly, with $128M in dormant assets.
- CZ advocates industry-wide ‘will functions’ and regulatory support for minor accounts.
Binance has implemented emergency contact and inheritance features in its June 12 platform update, addressing the growing issue of cryptocurrency assets lost due to user deaths. The new functionality allows users to designate emergency contacts who can submit inheritance applications when account holders become unable to access their funds. This provides a structured approach to asset recovery for surviving family members.
Cryptocurrency analyst Cryptobrave highlighted the urgency of this feature, noting that over $1 billion worth of crypto assets are inherited by centralized exchanges annually when users die in accidents. The analyst’s April post identified this as a growing problem requiring immediate industry attention.
Statistical Analysis Reveals Scale of Dormant Asset Problem
Cryptobrave calculated that approximately 200,000 Binance users die accidentally each year based on global accident death rates. With over $160 billion worth of assets being held by users in 250 million accounts on Binance, the average user has $640 of cryptocurrency. This means a minimum of $128 million worth of legacy assets become idle on the platform each year.
Binance co-founder Yi He rebutted the 200,000 estimate and said that it could be less because the platform has a younger user base. She did, however, confirm that Binance has had to handle cases of users who died without leaving behind wills. When this happens, the exchange requests death certificates and often comes with complex family fights over inheritance rights. These cases have necessitated preventive measures.
CZ Urges All Exchanges To Implement Will Functions
Binance’s Changpeng Zhao pushed the discussion beyond single-platform solutions and asserted that every cryptocurrency platform should incorporate will functions. He stated, “Every platform should have a ‘will function’—so that when someone is no longer around, their assets can be distributed to designated accounts according to specified proportions.”
CZ also encouraged regulatory frameworks for enabling the children to hold accounts, albeit with limitations on trading. This would enable parents to send money to children while still ensuring sufficient protection. This addresses concerns around underage individuals gaining entry to high-risk trading activities while still enabling inheritance features.
The inheritance mechanism also resolves technical and legal issues of cryptocurrency estate planning. Inheritance legislation continues to fail to provide for digital assets, particularly when access to private keys or account data is lost upon death. Centralized exchanges can offer secure and legally compliant ways to recover assets after a user’s death.
The operation of such systems requires a sensitive balance between security and accessibility. Exchanges must authenticate death certificates and display clear inheritance hierarchies without permitting false claims.
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