What happens to self-custodied crypto when the owner dies or loses access?

No one to call

Bitcoin.org notes that, unlike with your bank, there are very few ways to recover a lost password.¹ ethereum.org says that if you lose the keys to an ordinary account, they can't be recovered.³ The FTC says that when a wallet is lost or stolen, you're likely to find no one can step in to help.⁴

Bitcoin.org applies this to death. Your coins can be lost forever if you have no backup plan for family. If nobody knows where your wallets or passwords are when you're gone, there is no hope of recovering the funds.¹

Mastering Bitcoin makes the same point about memory. Suppose a recovery phrase lives only in your head. If your heirs can't get into the wallet, they won't be able to inherit the coins.⁵

Crypto held by a company is different

An exchange account is tied to a username and password, which can be recovered in the usual way.⁶ There, the exchange, not you, controls the private keys.⁷ The trade-off is the one in Lesson 1: the company itself can fail.⁷

Telling someone, without telling too much

So someone needs to know where your wallets are.¹ But a will may not stay private. In England and Wales, for example, probate records can be searched online. A copy, including any will, can be ordered for £16.⁸ A new record goes online about 14 days after probate is issued.⁸

Sharing the job

Several tools spread the job across more than one person or place.^2,1,3

• Split backups. SLIP-39 spreads a backup among trusted people, so it can survive even if one or a few of them are compromised.² Fewer shares than needed reveal nothing.²
• Multisig wallets. Bitcoin can require several separate approvals before coins move, for example 3 of 5 people.¹ People can use this so that one stolen device or one break-in isn't enough for a thief.¹
• Backup keys. Smart-contract wallets on Ethereum can add backup keys, which can replace a key that has been exposed. These keys can be spread among trusted people.³

When you lose access yourself

Bitcoin.org and the makers' guides cover the common cases:^1,9,10,11

The SEC's warning is simple: if your keys or recovery phrases are lost or stolen, you may lose access to your crypto.⁷

Beware the "recovery" offer

Scam victims are targets for a second scam. The FBI has warned of fake law firms that contact victims and offer to recover lost crypto. Some ask for fees up front.¹² Law enforcement does not charge victims a fee to investigate crimes.¹²

In 2025, the FBI received 10,516 complaints about recovery scams, with $1.4 billion in reported losses.¹³ The FBI notes those losses may include money lost in the earlier scam.¹³