In the post-FTX crypto order, investors all around the world are moving towards decentralized wallets. The decentralization of crypto storage incites safety, security, and trust in the crypto space and takes back the power from centralized players. Even though the idea of self-custody of your crypto asset might align perfectly with the ideals of blockchain security, it also makes it practically impossible for anyone else to access your cryptographic assets.
Blockchain wallets are extremely secure. There have been cases in which users were locked out of their crypto wallets because they lost access to their private keys. This extreme level of security might become the bone of contention in case of an emergency in your absence.
This is where nominees of blockchain assets come into the picture. In this CoinGabbar blog, we are going to talk about the significance of having a nominee in your financial records and if is it possible to do so for your crypto wallet as well.
Who is a Nominee?
In finance, the nominee is an individual who is entrusted by an entity or firm to take over control of all the assets and securities held in its name. In case of any mishappening or emergency, the beneficiary nominee would be allowed to access the assets. Nominating a beneficiary is an important part of securing financial assets in the case of the death of the proprietor.
However, this is not a common practice amongst crypto investors to choose a nominee for their assets even in the case of millions of dollars worth of assets held in their cold wallets.
Can There Be A Nominee for Crypto Wallets?
In centralized exchanges, there are no fixed rules for what happens with the crypto assets when any of the investors die. Some of the exchange even seizes all the assets of those users who are reported either dead or missing. Other digital wallets lock out the assets of such users forever and those assets get wasted. Sometimes in the case of centralized exchanges, they have to surrender all the digital assets of the deceased user to the government.
So as of now, if you are not making extra efforts to ensure that you have a nominee for your blockchain assets, there is no mechanism in place to make your cryptocurrencies available to those who deserve them the most. Even though declaring a nominee in almost all financial contracts is a norm, no attempts are being taken by the regulators to ensure that the assets of the users are secured even after his death.
