Does Your Crypto Wallet Have a Nominee

Does Your Crypto Wallet Have a Nominee?
Nomination in the Crypto Age

In the post-FTX crypto order, investors all around the world are moving towards
decentralized wallets. The decentralization of crypto storage incites safety, security,
and trust in the crypto space and takes back the power from centralized players.
Even though the idea of self-custody of your crypto asset might align perfectly with
the ideals of blockchain security, it also makes it practically impossible for anyone
else to access your cryptographic assets.
Blockchain wallets are extremely secure. There have been cases in which users were
locked out of their crypto wallets because they lost access to their private keys. This
extreme level of security might become the bone of contention in case of an
emergency in your absence.

This is where nominees of blockchain assets come into the picture. In this
CoinGabbar blog, we are going to talk about the significance of having a nominee in
your financial records and if it is possible to do so for your crypto wallet as well.

Who is a Nominee?

In finance, the nominee is an individual who is entrusted by an entity or firm to take
over control of all the assets and securities held in its name. In case of any
mishappening or emergency, the beneficiary nominee would be allowed to access
the assets. Nominating a beneficiary is an important part of securing financial assets
in the case of the death of the proprietor. However, this is not a common practice
amongst crypto investors to choose a nominee for their assets even in the case of
millions of dollars worth of assets held in their cold wallets.

Can There Be A Nominee for Crypto Wallets?
In centralized exchanges, there are no fixed rules for what happens with the crypto
assets when any of the investors die. Some of the exchange even seizes all the assets
of those users who are reported either dead or missing. Other digital wallets lock
out the assets of such users forever and those assets get wasted. Sometimes in the
case of centralized exchanges, they have to surrender all the digital assets of the
deceased user to the government.

So as of now, if you are not making extra efforts to ensure that you have a nominee
for your blockchain assets, there is no mechanism in place to make your
cryptocurrencies available to those who deserve them the most. Even though
declaring a nominee in almost all financial contracts is a norm, no attempts are

being taken by the regulators to ensure that the assets of the users are secured even
after his death.

However, you can nominate a beneficiary for your cryptocurrencies as long as you
are using a centralized exchange that does have custody of your private keys. If your
exchange or wallet has access to your private keys you’d be able to mention your
nominee in a non-probate contract. Third-party e-nomination services such as
Octowill enable crypto investors to nominate their loved ones as the beneficiary of
their digital assets.

On the contrary, none of the legal contracts can save up digital assets after the death
of the investor if he has stored his digital assets in a non-custodial wallet and never
shared the private keys with anyone. In this situation, all of the crypto assets would
stay locked in that crypto wallet and no one could retrieve anything from it.

Benefits of Having a Nominee for Digital Assets
Having a nominee is extremely important even if you are in the perfect phase of your
life. Nobody can predict what is going to happen tomorrow and that is why it is wise
to have your nominee in case of any unfortunate event. Here are some of the benefits
of declaring a nominee for your custodial wallets.

● e-Nomination makes it easier for your loved ones to gain back control of
your digital investments

● It ensures that crypto funds are given to the rightful heir of your choice
● Third-party e-nomination services provide the family with all legal

assistance for the smooth transfer of funds
● e-Nominations are enforceable without probate and that makes the process

easier

● Life is unpredictable and uncertain situations can arrive when you expect
them the least. Thus it is wise to safeguard your investment for your
dependents

If you are a user of non-custodial wallets or hardware wallets, you can alternatively
share your wallet’s private keys only with those you are willing to share all of your
investments with.

The Way Forward
Cryptocurrencies are becoming the most popular method of value transfer on the
internet and that makes nominating a beneficiary for your crypto assets more
important. Cryptocurrencies are relatively new to other financial instruments that
we have been using for ages and thus much attention has not been put into things
such as this.

However, with time the need for such safety mechanisms will safeguard many
families and dependents in case of unfortunate events.

THANK YOU