Binance has launched a new inheritance feature aimed at helping users’ families recover crypto funds after the account holder’s death. The update, introduced on June 12, allows users to set emergency contacts who can apply for access to the deceased’s account through a formal 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 of digital assets are abandoned each year on centralized exchanges.
In a report published in April last year, the analyst underlined that the industry needs to address this situation immediately.
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According to Cryptobrave, it had been estimated that about 200,000 Binance users would accidentally die every year. With more than 250 million users and 160 billion invested on the site, the average balance for each person is $640$.
This implies that more than a hundred and twenty-eight million dollars worth of cryptocurrency goes to waste each year in the accounts of dead customers.
Although the co-founder of Binance, Yi He, doubted the accuracy of the death court estimate, she said that the platform regularly deals with inheritance cases. Most of them involve extreme family conflicts and the presentation of legal documents such as a death certificate.
As she observed, the lack of a straightforward process, particularly, triggers delays and confusion, and the new feature aims to eliminate them.
Binance Takes the Lead in Tackling Dormant Digital Wealth
Binance founder Changpeng Zhao has called on all crypto exchanges to introduce similar inheritance solutions. He emphasized the need for a “will function” that enables assets to be distributed according to user-specified wishes.
CZ also proposed the creation of child-friendly crypto accounts, which would receive assets but come with trading restrictions.
The new system addresses ongoing legal and technical barriers to cryptocurrency inheritance. Most jurisdictions are not ready to present legislation on digital assets for estate planning, particularly in the event of a loss of a set of private keys or log-in information.
This method introduced by Binance is a safe way of recovery with a centralized system that allows legitimate heirs to reclaim funds.
To curb abuse, the site will be subjected to adequate paperwork and identity verification prior to fund release. It is to prevent the manipulation of accounts and empower families with a clear-cut recovery process.
By enabling inheritance features, Binance is offering a solution to millions of dormant assets. The platform’s proactive step could drive industry-wide changes in managing crypto wealth after death.
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