This is the fifth of our Crypto Digest blogs brought to you by Mezzle Law’s resident crypto lawyers. Subscribe to stay up to date with our short and informative blogs on all things law and crypto (lex cryptographia).
In an earlier blog, we gave an overview of the risks involved in investing in crypto. The aim of that wasn’t to deter investment, simply to highlight the risks involved which can be significant, and need to be considered before boarding the crypto wagon. In our latest blog, we wanted to discuss Wills.
Why are we discussing Wills in our Crypto Digest do you ask?! Let’s recap.
When investing in cryptocurrencies you will store your asset in a wallet – this will either be a ‘soft’ wallet, typically an online software-based wallet, or a ‘hard’ wallet, which is external hardware. You, and you alone, will have access to your wallet. You must never share your private key under any circumstance. However, there is probably one reasonable exception to that rule. If you were hit by the proverbial bus tomorrow, nobody would be able to access your wallet, and that includes your loved ones. No rights will automatically transfer to them, and there is no central organisation that stores your private key.
By updating your Will, if you have one, or creating one if you don’t already have one, you can include the key to your wallet. This will ensure your family members or anyone you wish to nominate can access your crypto-assets following your unfortunate demise. Some of our readers will be familiar with the mysterious circumstances surrounding Quadriga CX, and the continued assertion by Gerry Cotten’s wife, Jennifer, that Gerry never provided her with the passwords to access the millions of dollars worth of crypto locked in the Quadriga exchange. She asserted that Gerry was the only person with access, and the chance of accessing the accounts diminished to nothing following Gerry’s death.
With the advent of blockchain technology, we also have the ability to use smart contracts for estate planning and writing wills. Smart contracts are programmes written in code stored on a blockchain that runs when certain predetermined conditions are met. This allows for automation and in essence work on the basis of statements like “if/when ‘x’ happens… then ‘y’ is in force.” Once a predetermined condition is met, the contract is executed immediately.
A Will coded on the blockchain as a smart contract can be automatically executed and the contents of the will would only be accessible to its beneficiaries. As with most technological advancements though, the law needs to catch up as it’s unlikely the law will recognise crypto-wills as being legitimately enforceable at this moment in time.
Smart contracts have also been used to sell music, circumventing the need for having a music label act as an intermediary, allowing the artist to receive a larger share of the sale proceeds. One can quickly see that smart contracts could also facilitate the buying and selling process of any item, and therefore could eventually be the preferred method of online transaction avoiding the need for sites such as eBay.
If you are considering updating your Will, or need to have one in place, please contact us so that we can put you in touch with our Will writing experts. If you need any advice in the crypto space, then you can speak to our crypto specialists to see how Mezzle Law can help you.
Subscribe to RSSTo use our RSS news feed, please download RSS Subscription Extension (by Google) and subscribe to our latest legal insights.