What Happens to Cryptocurrency When Someone Dies in the UK

The Short Answer

When someone dies, their cryptocurrency — Bitcoin, Ethereum, or any other digital currency — forms part of their estate, just like a bank account or a house. It can be inherited, and it may be subject to inheritance tax.

But here is the problem: unlike a bank account, there is no institution holding the funds that you can simply contact. If the person who died was the only one who knew the passwords, private keys, or seed phrases needed to access their crypto, those assets can become permanently locked away — potentially worth thousands or even hundreds of thousands of pounds, with no way to recover them.

Why Crypto Is Different From Other Assets

Traditional financial assets — bank accounts, pensions, ISAs — are held by institutions. When someone dies, the executor contacts the institution, provides the death certificate and grant of probate, and the funds are released. It is bureaucratic, but it works.

Cryptocurrency operates differently:

• It is decentralised. There is no bank or central authority holding the coins.
• Access depends on private keys. A private key is a long string of characters that proves ownership. Lose it, and the crypto is gone — permanently.
• Seed phrases are the backup. Most wallets generate a 12 or 24-word recovery phrase when they are set up. This phrase can restore access to the wallet from any device.
• Some crypto is held on exchanges (like Coinbase, Binance, or Kraken), which do have account recovery processes — but they require proof of death and legal authority.

Step 1: Determine What Crypto the Person Held

This is often the hardest part. Unlike a bank statement that arrives in the post, cryptocurrency holdings can be invisible if you don't know where to look.

Where to search:

Location	What to Look For
Email accounts	Registration confirmations from exchanges (Coinbase, Binance, Kraken, etc.)
Phone or computer	Wallet apps (Trust Wallet, MetaMask, Ledger Live, Exodus)
Physical storage	Hardware wallets (small USB-like devices from Ledger or Trezor), written seed phrases, printed QR codes
Password managers	Entries for crypto exchanges or wallets
Bank statements	Transfers to crypto exchanges (look for company names like "CB Payments" for Coinbase)
Documents or notes	Handwritten seed phrases — often stored in safes, filing cabinets, or with solicitors

If you find a hardware wallet but no seed phrase or PIN, do not attempt to guess — most devices lock permanently after a number of failed attempts.

Step 2: Exchange-Held Crypto (Coinbase, Binance, etc.)

If the deceased held crypto on a centralised exchange, the process is similar to closing a bank account:

1. Contact the exchange's support team and explain that the account holder has died
2. Provide documentation — typically a death certificate, grant of probate or letters of administration, and proof of your identity as executor
3. The exchange will verify and release the funds — either to the estate's bank account or to a nominated wallet

Each exchange has its own process and timeline. Coinbase, for example, has a specific deceased account process that requires notarised documents. Binance requires similar verification.

Expect delays. These processes can take weeks or months, particularly if the exchange is based outside the UK.

Step 3: Self-Custody Crypto (Private Wallets)

If the person stored their crypto in a private wallet — whether a hardware device, a desktop application, or a mobile app — you will need the private key or seed phrase to access it.

If you have the seed phrase: You can restore the wallet on a new device and transfer the assets. Be extremely careful with this process — if you are not familiar with crypto wallets, consider hiring a specialist (see below).

If you do not have the seed phrase or private key: Unfortunately, there is no recovery mechanism. This is by design — decentralisation means no one can override the security. The crypto still exists on the blockchain, but it is permanently inaccessible.

This is why planning ahead is so important.

Inheritance Tax and Crypto

HMRC treats cryptocurrency as property for tax purposes. This means:

• Crypto forms part of the deceased's estate for inheritance tax (IHT) purposes
• The value is assessed at the market price on the date of death
• If the total estate exceeds the nil-rate band (currently £325,000, or up to £500,000 with the residence nil-rate band), IHT at 40% may be due on the excess
• Capital gains tax may also apply if the executor sells the crypto at a higher price than the deceased originally paid

Valuing crypto for probate can be complex because prices fluctuate constantly. HMRC expects you to use a reasonable valuation method — typically the closing price on a major exchange on the date of death.

If the estate includes significant crypto holdings, it is worth instructing a solicitor or accountant with experience in digital assets.

How to Plan Ahead

If you hold cryptocurrency yourself, the single most important thing you can do for your family is to ensure they can access it after your death.

Practical steps:

• Record your holdings — which coins, which wallets, which exchanges
• Store seed phrases securely — in a fireproof safe, with a solicitor, or in a sealed envelope with your will (though be aware that wills become public documents after probate)
• Use a password manager and ensure a trusted person has the master password or emergency access
• Consider a letter of wishes alongside your will that includes instructions for accessing digital assets
• Tell your executor that you hold crypto and where to find the access details — they don't need the technical knowledge, just the location of the information

Getting Professional Help

If you are an executor dealing with cryptocurrency and feeling out of your depth, you are not alone. This is a relatively new area and many solicitors are still catching up.

Look for:

• Solicitors with digital asset experience — some firms now specialise in crypto estate planning
• Crypto recovery specialists — firms that can help locate and recover exchange-held assets (be cautious of scams in this space; never share seed phrases with anyone who contacts you unsolicited)
• Accountants familiar with HMRC's crypto guidance — essential if the holdings are substantial

Services like GetPassage can help you organise the broader estate administration process, keeping track of all the assets — digital and traditional — that need to be dealt with after a death.

The Key Takeaway

Cryptocurrency is a legitimate, inheritable asset — but it requires more planning than traditional finances to ensure it is not lost when someone dies. If you are dealing with a loved one's estate and suspect they held crypto, start with their email and devices, check for exchange accounts, and seek specialist help if needed.

And if you hold crypto yourself, please — make a plan. Your family will thank you.