• Reliance on keys can cause staggering losses in generational wealth transfer and crypto
  • Anchorage’s partnership with Two Ocean Trust hopes to solve questions about estate planning and digital assets

As digital assets enter the portfolio of many investors, Anchorage has collaborated with Two Ocean Trust to answer the question of generational wealth transfer, estate planning and digital assets.

Called the COIN Trust, or Crypto Optimized Irrevocable Non-grantor Trust, the new tool is designed to meld familiar estate-planning mechanisms with Anchorage’s digital assets which are designed to not be reliant on a single point—or person—of failure. 

Avoiding estate losses

In the short history of digital assets, there have been some absolutely staggering losses that have come as a result of lost people and lost passwords. Without the cryptographic keys that govern access to the asset on the ledger, they are a useless collection of ones-and-zeroes.

“The ‘not my keys, not my coin’ philosophy’—a motto of Bitcoiners, like ‘be your own bank’—can bend a bit if they know there is a safe, reliable and easily accessible method to protect their wealth,” Joel Revill, Two Ocean Trust’s chief executive, has been quoted as saying

Disclosing passwords to accounts via a will isn’t exactly a new idea, but the rocketship nature of the value of bitcoin means there are many that would be more comfortable with professionally managed estate. After all, if someone is known to be crypto-rich, writing down the keys to their virtual wealth probably is not something they are comfortable with. 

Estate issues to increase

This all isn’t exactly a new problem in the industry. As early as 2014, during the first bitcoin rally, the question was on many people’s mind. CoinDesk published a piece that outlined the complications digital wealth transfer for the deceased has compared to regular bank accounts.  

“Legal experts caution that the number of estate issues involving bitcoins is likely to increase as more people start using digital currencies,” the publication wrote at the time.  

Not many cryptocurrency exchanges, after all, publish a policy about transferring of assets upon death of an account holder perhaps for fear that it would invite fraud and a point of security failure. Publicly traded Coinbase lists such a policy that specifies what documentation needs to be provided, while Binance simply requests that the user contact the support team. 

Founded in 2017 to address custody concerns in digital assets, Anchorage became the first federally chartered digital asset bank earlier this year. 

Previously, Monica told Blockworks, “The bank’s goal was always to create a platform that you can actually build products on top of. We started out as a custodian, but we’ve evolved into something that is much more.” 

As digital assets have become more mainstream, Anchorage’s offerings evolved as well, Monica added then. Now the bank is adding yet another mainstream offering with estate planning tools. 

  • Blockworks
    Sam Reynolds is a Taipei-based reporter, covering digital assets and regulation throughout Asia. Before joining Blockworks he was an editor at Forkast News and an analyst with IDC.