Cryptocurrency inheritance. Is it possible?

An article has appeared on the website of the Federal Notary Chamber, where an opinion is expressed about the impossibility of inheriting cryptocurrency. As the main obstacle, it is indicated that it is difficult to confirm the ownership of this property to a specific person - "a notary cannot formalize hereditary rights without identifying and checking the fact that the property belongs to the testator," "impersonal virtual wallets simply do not allow this." Such an opinion, in the classical expression, is more than a mistake, it is a delusion.

It would be wrong to refuse potential heirs and heirs at the disposal of cryptocurrencies, referring to speculative "impossibilities," especially since the law does not prevent such an order

Firstly, it should be noted the confusion made in the article: "bitcoin and bitcoin wallets" are equated with each other, which is absolutely wrong, because one is a digital asset, and the other is a place/means of storing it, and such funds are different, however, as well as types of wallets. Secondly, it is surprising that until now notaries have not dealt not only with the types of wallets, but also with the fact that in reality the identification of the owner is not only possible, but also widely practiced, both by "manual" and numerous software tools that are available for use, including notaries. And in some "cold" hardware wallets, this function is actually built in. Not to mention the fact that you can also manage data that allows you to access any type of wallet, and if it is a medium, then transfer it as a thing.

But back to "impossibility." The article probably cites Bitcoin as an example out of habit, although this is far from the only type of cryptocurrency. For example, in relation to Ether (ETH) and other crypto assets on the Etherium blockchain, the so-called method of signing and verifying ownership is widely used, which allows you to make sure that this person has access (keys) and the right to dispose of cryptocurrencies at a specific address. Since we are talking about blockchain, the invariability and continuity of addresses and records is technologically ensured. This method works for such popular wallets as Metamask, Ledger, Trezor. By means of hashed messages on signing and verification, confirmation is made that this person has direct access to this address at which there is a record of the corresponding cryptocurrency units. Messages (so-called zero transactions) are recorded in a decentralized registry and remain available, checked in real time. In essence, the message is an electronic signature, which is provided for by Russian law.

The recording of the use of this method, we believe, can be made by a standard notarial procedure for inspecting pages on the Internet. Many crypto exchanges ("hot "/" custodial" wallets) also provide for onboarding identification/further (ongoing) authentication - by analogy with traditional financial institutions, as well as the option to subsequently request verification of the owner. Note that various verification methods are used in KYC procedures and in AML/TF checks fully applicable to cryptocurrencies according to FATF recommendations. Impersonation exists in a number of cases, but it is clearly not ubiquitous.

That is, it would be wrong to refuse potential heirs and heirs to dispose of this property, referring to speculative "impossibilities," especially since the law does not prevent such an order. On the contrary, since the turnover is increasingly using this object, it is necessary to work out the methodology for the work of notaries with this type of property. Our specialists are ready to help in this, since we have solid and practical experience in compliance in the field of cryptocurrencies and knowledge of regulatory requirements.