Yes, an estate can legally retrieve cryptocurrency from a centralized exchange like Coinbase or Kraken, but it requires navigating a formal, court-supervised process. The primary conflict arises from federal laws like the Stored Communications Act (SCA) and the Computer Fraud and Abuse Act (CFAA), which legally bar exchanges from granting account access to anyone but the original user, even a spouse or child. This creates a direct clash with the authority of a court-appointed executor, whose legal duty is to gather all of the deceased’s assets. The immediate negative consequence is that without the correct legal orders, billions of dollars in digital assets remain frozen and inaccessible, effectively lost to the families they were intended for.
This isn’t a rare problem; an estimated 20% of all Bitcoin in existence, worth hundreds of billions of dollars, is considered permanently lost, with a significant portion attributed to owners passing away without leaving access plans. This guide breaks down the precise, court-approved path to prevent that from happening to your family. It provides the exact steps and documents needed to successfully reclaim these modern assets.
Here is what you will learn:
- 🔑 Why the difference between an “exchange account” and a “private wallet” is the single most important factor that determines if you can recover the crypto.
- ⚖️ The specific legal conflict that freezes accounts and how a court order is the only key to unlocking them.
- 📄 A line-by-line breakdown of the exact legal documents you’ll need, what they mean, and how to get them from the court.
- 🏢 The step-by-step procedures for major exchanges like Coinbase, Kraken, and Binance, including real-world examples of what can go wrong.
- 💸 How to handle the complex tax rules, including the “step-up in basis” that could save your family a fortune in capital gains taxes.
The Great Divide: Why “Where” Crypto Is Stored Is Everything
Before you take a single step, you must answer one question: how did your loved one store their cryptocurrency? The answer determines whether you have a clear, though bureaucratic, path to recovery or if you are facing the digital equivalent of a locked treasure chest buried without a map. This distinction is absolute and governs every action you will take.
Custodial Exchange Accounts: The Path to Recovery
A custodial account is one held on a centralized platform like Coinbase, Kraken, Binance, or Gemini. Think of these exchanges as digital banks or brokerage firms. While your loved one owned the assets, the exchange acted as the custodian, meaning the company held the complex private keys on the user’s behalf.
This is the best-case scenario for an executor who has no access information. Because a regulated, centralized company is involved, a legal framework exists for you to assert your authority. Through the court process known as probate, you can obtain legal documents that compel the exchange to grant you access to the assets, allowing you to transfer them to the estate.
Non-Custodial Wallets: The Digital Brick Wall
Non-custodial wallets, also called “self-custody,” are the opposite. These include hardware wallets (physical devices like a Ledger or Trezor), software wallets (apps like MetaMask), or even a piece of paper with codes written on it. In this setup, the user—and only the user—held the private keys and the all-important seed phrase (a 12 or 24-word recovery phrase).
If your loved one used a non-custodial wallet and did not leave behind the physical device, the PIN, and the seed phrase, the assets are permanently and irretrievably lost. There is no company to call, no court order that can force access, and no password recovery process. The cryptographic security that protected the assets now works against the estate, locking the funds away on the blockchain forever.
| Storage Method | Who Controls the Keys? | Is Recovery Possible for an Executor? |
| Custodial Exchange (e.g., Coinbase, Kraken) | The Exchange (a third-party company) | Yes. A legal process exists to compel the exchange to transfer the assets. |
| Non-Custodial Wallet (e.g., Ledger, Trezor) | The User (the deceased person) | No. Without the private keys or seed phrase, the assets are permanently lost. |
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The Legal Bedrock: Why Old Laws Govern New Money
Once you confirm the assets are on a custodial exchange, you must understand the legal framework that gives you power. Cryptocurrency may seem like a new frontier, but its treatment in the U.S. legal system is rooted in long-standing principles of property law. This is both a blessing and a curse for executors.
The IRS Ruling That Changed Everything: Crypto Is Property
The foundational ruling that governs all crypto inheritance is IRS Notice 2014-21. In this notice, the Internal Revenue Service declared that for tax purposes, cryptocurrency is to be treated as property, not currency. This classification is critical because it means crypto is handled just like other assets in an estate, such as stocks, real estate, or artwork.
This has two major consequences. First, it means that all the established laws of inheritance and estate administration apply directly to crypto. Second, it subjects crypto to capital gains taxes upon sale, but also makes it eligible for beneficial tax rules for heirs, which we will cover later.
Probate: The Court Process That Grants You Power
Because crypto is property, it becomes part of the deceased’s estate and is subject to probate. Probate is the formal, court-supervised process of validating a will (if one exists), appointing an executor to manage the estate, paying the deceased’s debts and taxes, and distributing the remaining assets to the rightful heirs.
This process is your key to the kingdom. The probate court is the only entity that can grant you the legal documents—called Letters Testamentary or Letters of Administration—that officially prove you are the person in charge of the estate. These court orders are the only instruments a crypto exchange will recognize to override their terms of service and grant you access.
The Intestacy Trap: Dying Without a Will
If a person dies “intestate,” meaning without a valid will, their property is distributed according to state-specific intestacy laws. These laws establish a rigid hierarchy of heirs, typically starting with a surviving spouse, then children, then parents, and so on. A probate court will still oversee the process but will appoint an “administrator” (instead of an executor) to manage the estate according to these state laws.
While intestacy laws determine who legally owns the crypto, they do nothing to solve the problem of access. The legally recognized heir must still go through the full probate process to have an administrator appointed who can then obtain the necessary court orders to contact the exchange. The absence of a will makes the process more complicated and can lead to outcomes the deceased never intended.
The Executor’s Four-Step Guide to Retrieving Crypto
As the executor or personal representative, your job is to be a methodical detective and a persistent administrator. Follow these four steps in order to locate, legally secure, and transfer the cryptocurrency from an exchange to the estate.
Step 1: The Hunt—Finding the Digital Accounts
Unlike bank accounts that send paper statements, crypto exchanges often exist only as an app on a phone or an icon in a web browser. Your first task is to find proof that an account exists and identify which exchange holds the assets.
Actionable Discovery Methods:
- Follow the Money: The most reliable method is to review the deceased’s bank and credit card statements for the past several years. Look for electronic funds transfers (ACH) or wire transfers to or from names like Coinbase, Kraken, Binance, Gemini, or FTX. These transactions are your smoking gun.
- Search Digital Devices: If you have legal access to the deceased’s computer and smartphone, search for installed mobile apps from crypto exchanges. Also, search their email accounts for “welcome” messages, trade confirmations, password reset emails, or support tickets from these platforms.
- Check Tax Returns: The deceased may have reported capital gains or losses from crypto trading on past tax returns. This would be listed on IRS Form 8949 and could name the specific exchange used for the transactions.
- Talk to People: Interview close family members, friends, or a financial advisor. The deceased may have casually mentioned their crypto activities, providing a crucial lead.
Step 2: Getting the “Golden Ticket”—Securing Legal Authority
Once you’ve identified an exchange, you cannot simply call them. You must first be formally appointed by a probate court as the legal representative of the estate. This is the most important and non-negotiable step.
This step often creates a frustrating “chicken-and-egg” problem. The court wants an inventory of assets to open the probate case, but the exchange won’t give you the account details without a court order. The solution is to file the probate petition with the evidence you have (like a bank statement showing a transfer to Coinbase) and state that the exact value is “unknown at this time.” The court can then grant you initial authority, which you can use to get the full details from the exchange and later amend the estate inventory.
The Essential Documents You Must Obtain:
| Document | What It Is & Why It’s Needed | How to Get It |
| Certified Death Certificate | The official government document proving the death. It is the foundational document required by every court and financial institution to begin any post-death process. | Order multiple original copies from the vital records office in the state or county where the death occurred. Exchanges will not accept photocopies. |
| Letters Testamentary | A court order issued during probate that officially appoints the executor named in the will. This is the “golden ticket” that proves to the exchange you have the legal authority to act for the estate. | You must file a petition with the probate court in the county where the deceased lived. This almost always requires the help of an estate attorney. |
| Letters of Administration | A court order issued during probate that appoints an administrator when the deceased died without a will. It serves the same function as Letters Testamentary, granting legal authority to manage the estate. | The process is the same as for Letters Testamentary: petitioning the probate court, which will appoint an administrator based on state intestacy laws (usually the next of kin). |
| Small Estate Affidavit | A simplified legal document that can sometimes be used to collect assets without a full probate process. This is only an option if the total value of the estate is below a certain threshold, which varies dramatically by state (e.g., from $25,000 to $175,000). | An estate attorney can advise if the estate qualifies. If it does, you complete a state-specific form and have it notarized. Some exchanges may accept this in lieu of court letters for smaller accounts. |
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This table is a synthesis of the documentation requirements listed by major exchanges like Coinbase, Binance, and Kraken.
Step 3: Making First Contact—How to Approach the Exchange
With your legal documents scanned and ready, you can now formally contact the exchange. This initial communication must be handled professionally and securely to avoid scams and delays.
Do’s and Don’ts of Contacting an Exchange:
| Do’s | Don’ts |
| ✅ Use Official Support Channels Only. Go directly to the exchange’s official website (e.g., help.coinbase.com) and find their dedicated support or contact form for deceased users. | ❌ Never Respond to Unsolicited Help. Do not reply to direct messages on social media or emails from people claiming to be support agents. These are almost always phishing scams. |
| ✅ Be Clear and Concise. Your first message should state your legal role (executor/administrator) and your purpose (to access a deceased user’s account). | ❌ Do Not Share Passwords or Private Keys. Never include any of the deceased’s passwords or other sensitive login information in your communications. The exchange will never ask for this. |
| ✅ Have Documents Ready. Scan high-quality PDFs of your Death Certificate, Letters Testamentary/Administration, and your own government-issued photo ID. Some exchanges, like Binance.US, specifically request this format. | ❌ Do Not Use the Deceased’s Login. Attempting to log into the account yourself, even if you have the password, may violate the exchange’s Terms of Service and could lead to the account being frozen, complicating the official process. |
| ✅ Reference the Deceased’s Information. Include the deceased’s full name, email address associated with the account, and any account ID or username you may have found. | ❌ Do Not Expect an Immediate Response. This process is handled by a specialized compliance or legal team, not standard customer support. Be prepared for it to take several days or even weeks to get an initial substantive reply. |
Sample Initial Email:
Subject: Deceased User Account – Estate of
To the Legal/Compliance Department,
I am the court-appointed executor for the estate of, who I believe was a user of your platform. I am writing to initiate the process of accessing and transferring the assets held in their account to the estate.
Pursuant to your company’s procedures, I have obtained the certified Death Certificate and the Letters Testamentary issued by the [Name of Court] on. I am prepared to provide these documents, along with my personal identification, upon your instruction. Please advise on the next steps.
Step 4: The Long Haul—Verification and Asset Transfer
After you’ve made contact and submitted your initial documents, the final phase begins. This stage requires patience, persistence, and careful decision-making. It is a bureaucratic process that can take anywhere from a few weeks to many months.
The Executor Verification Process: The exchange must not only verify the death and your legal authority but also your personal identity as the executor. This typically involves:
- Submitting Your ID: You will need to provide a clear, high-resolution copy of your own valid, government-issued photo ID (e.g., driver’s license or passport).
- Unique Verification Steps: Some exchanges have unique requirements. Binance.US, for example, famously requires the executor to submit a “selfie video” in which they state their name and their intention to manage the deceased’s assets. This is done to prevent fraud.
Asset Transfer Options: Once the exchange has approved your claim, they will typically present you with two options for handling the funds. This is a critical decision that has significant tax and financial implications for the estate.
- Liquidation to Fiat: The exchange sells all the cryptocurrency in the account at the current market price and transfers the resulting cash (e.g., U.S. dollars) to a verified bank account belonging to the estate. This is often the simplest option, especially if the heirs do not want to manage crypto themselves.
- In-Kind Transfer: The actual cryptocurrency (e.g., Bitcoin, Ethereum) is transferred to a new account on the same exchange, opened and controlled by you in your capacity as the executor of the estate. This is the necessary choice if the estate plan or the heirs wish to retain the crypto assets instead of immediately selling them.
Real-World Scenarios: The Good, The Bad, and The Ugly
The official procedures outlined by exchanges can mask a wide range of real-world experiences. Understanding these common scenarios will help you set realistic expectations and prepare for potential roadblocks.
Scenario 1: The Prepared Executor (The Ideal Path)
Sarah’s brother, Mark, passed away, leaving a will that named her as executor. Mark had told her he owned crypto on Gemini. Sarah hired an estate attorney, obtained Letters Testamentary from the probate court, and contacted Gemini’s support with all the required documents.
| Action Taken by Sarah (Executor) | Consequence / Exchange Response |
| Hired an estate attorney to open probate. | The court issued Letters Testamentary within six weeks, granting Sarah legal authority. |
| Contacted Gemini support with a clear request and all legal documents. | Gemini’s compliance team responded within a week, requesting verification of Sarah’s identity. |
| Provided her own ID and a signed letter of instruction. | Gemini verified her identity and provided a full accounting of Mark’s crypto holdings. |
| Instructed Gemini to liquidate the assets and transfer the cash to the estate’s bank account. | The assets were sold and the funds were transferred to the estate account within two weeks. |
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In this ideal scenario, the process was smooth because the executor knew where the assets were, followed the legal process perfectly, and the exchange had a responsive and efficient system.
Scenario 2: The Well-Intentioned Heir (The Common Mistake)
David’s father passed away, and while cleaning out his desk, David found a notebook with the username and password for a Coinbase account. Believing he was saving time and legal fees, David decided to log in himself to see what was there.
| Action Taken by David (Heir) | Consequence / Exchange Response |
| Logged into his deceased father’s Coinbase account from his own computer. | Coinbase’s security system detected a login from a new, unrecognized device and IP address, flagging the activity as suspicious. |
| Attempted to transfer the cryptocurrency to his own personal wallet. | The account was immediately frozen pending a security review, locking David out completely. |
| Contacted Coinbase support to explain the situation. | Coinbase support informed him that accessing another person’s account is a violation of their Terms of Service and that the account would remain locked until a court-appointed executor provided the proper legal documents. |
| Was forced to hire an attorney to start the probate process from scratch. | The process was significantly delayed, and the value of the crypto decreased while the account was frozen. |
This scenario illustrates the most common and costly mistake. Attempting a technical shortcut leads to an administrative lockdown, causing more delays and stress than following the proper legal procedure from the start.
Scenario 3: The Bankrupt Exchange (The Nightmare)
Maria was the administrator for her sister’s estate, who had a significant amount of crypto on the exchange FTX. Maria did everything right: she got the court orders and had all her documents. However, just as she was preparing to contact them, FTX declared bankruptcy and collapsed.
| Action Taken by Maria (Administrator) | Consequence / Bankruptcy Reality |
| Obtained Letters of Administration and a death certificate. | These documents are valid for proving her authority over the estate’s assets. |
| Attempted to contact FTX support to retrieve the assets. | FTX was no longer operating. All assets were frozen and under the control of the U.S. Bankruptcy Court. |
| Hired a specialized bankruptcy attorney. | The attorney filed a “proof of claim” on behalf of the estate in the bankruptcy proceedings, listing the estate as a creditor. |
| Waited for the bankruptcy process to unfold. | The estate’s crypto assets are now part of a massive, multi-year legal battle. Recovery is not guaranteed, and if any funds are returned, it will likely be years later and only be a fraction of the original value. |
This worst-case scenario shows that even perfect execution of the retrieval process is subject to the solvency of the exchange itself. It underscores the “not your keys, not your coins” risk of leaving assets on a custodial platform.
A Closer Look: Specific Protocols of Major Exchanges
While the core requirements are similar, each major exchange has its own nuances, quirks, and reported user experiences. Knowing these differences can help you tailor your approach.
Retrieving Assets from Coinbase
- Official Process: Coinbase has a formal, documented process for deceased users. The executor must submit a certified death certificate, probate court documents (Letters Testamentary, etc.), a copy of their own photo ID, and a signed letter of instruction detailing what to do with the funds.
- No Beneficiary Designations: Coinbase explicitly states that they do not support “payable-on-death” (POD) or beneficiary designations on accounts. The transfer is governed only by a will or state intestacy laws, making the probate process mandatory.
- The Reality Check: The official process can be misleadingly simple. A widely reported first-hand account from a mother acting as executor for her son’s estate detailed an 11-month ordeal. Despite providing all required documents, she was caught in a loop of non-responsive customer service, broken support links, and an inability to speak to a human. The inheritance was only transferred after she escalated the issue by filing formal complaints with the Better Business Bureau (BBB) and the Consumer Financial Protection Bureau (CFPB).
Navigating the Binance Inheritance Process
- Official Process (Binance.US): The U.S. arm of Binance requires the standard legal documents but adds a unique verification step: the executor must submit a “selfie video” stating their intentions for the assets. All documents must be submitted digitally as PDFs or high-quality photos.
- Official Process (Global Binance): The global platform has a feature called an “Inheritance Appeal.” This process requires the heir or executor to first create and verify their own Binance account. They then use their account to submit the appeal, providing the deceased’s account information and the necessary legal paperwork.
- Stated Timeline: Binance suggests a timeline of 1-2 months for the process but warns that complex cases can take longer.
Accessing a Deceased User’s Kraken Account
- Official Process: Kraken’s procedure is straightforward and aligns with traditional financial institutions. The executor must submit a request to their Compliance team with three key documents: their own photo ID, the death certificate, and the probate court order.
- No Beneficiary Designations: Like its competitors, Kraken does not currently allow users to add a beneficiary directly to an account.
- A Proactive Tip: Uniquely, Kraken’s support documentation advises users to include their “Kraken public account ID” in their will or estate plan. This small detail can significantly speed up the initial process for the executor by making the account easy to identify.
- The Reality Check: While the process is clear, users have reported that Kraken’s support can be a “bottleneck” and that withdrawals are often placed on hold for manual security reviews. Executors should be prepared for potential delays even after all documents are submitted.
Managing a Gemini Account Post-Mortem
- Official Stance: Gemini also does not offer beneficiary designations. Their official guidance is particularly clear for legal professionals: they advise estates to treat a Gemini account “similar to a traditional brokerage account.”
- What This Means for Executors: This statement is a clear signal that Gemini’s compliance department is set up to work within the standard legal framework of probate. An estate attorney can approach the process with the same legal instruments and expectations they would use for an account at a firm like Charles Schwab or Fidelity, providing a predictable path forward.
| Exchange | Allows Beneficiary Designations? | Unique Requirement or Feature | Reported User Experience |
| Coinbase | No | Requires a signed “Letter of Instruction” from the executor. | Can be extremely slow; users report needing to escalate to government agencies to resolve cases. |
| Binance | No | Requires the executor to create their own Binance account first (Global) or submit a “selfie video” (US). | Process can vary by jurisdiction; stated timeline is 1-2 months but can be longer. |
| Kraken | No | Proactively advises users to include their public account ID in their will to speed up the process. | Support can be a “bottleneck,” and withdrawals may be placed on hold for manual review. |
| Gemini | No | Officially advises estates to treat the account like a “traditional brokerage account.” | Implies a process familiar to estate attorneys, suggesting a more predictable legal interaction. |
Mistakes to Avoid: The Executor’s Minefield
The path to retrieving crypto is filled with potential missteps that can delay the process, increase costs, or even put the assets at risk. Avoiding these common errors is crucial for a successful retrieval.
Top 5 Mistakes Executors Make:
- Trying to Log In Directly: As seen in Scenario 2, this is the most common mistake. It violates the terms of service, triggers security freezes, and turns a simple administrative process into a complicated legal one.
- Putting Private Keys or Passwords in the Will: A will becomes a public document once it is filed with the probate court. Including sensitive access information like a password or seed phrase in the will is like publishing it on the internet for anyone to see and use.
- Giving Up Too Soon: The process is often slow and frustrating. As the Coinbase “rabbit hole” experience shows, initial non-responsiveness from customer service is common. Successful executors are persistent, keep meticulous records of their communications, and are prepared to escalate the issue if necessary.
- Falling for Phishing Scams: When you start asking for help online (e.g., on Reddit or X), you will be flooded with direct messages from scammers pretending to be “support agents” offering to “help.” They will try to trick you into giving them information or sending them funds. Only communicate through the official, verified support channels on an exchange’s website.
- Not Hiring an Attorney: While it may seem like an unnecessary expense, trying to navigate the probate court system and deal with the legal departments of multi-billion dollar exchanges on your own is a recipe for failure. An experienced estate attorney is essential to ensure the process is handled correctly and efficiently.
The Financial Maze: Volatility, Valuation, and Taxes
Gaining control of the crypto is a major milestone, but it’s not the end of the journey. As the executor, you have a fiduciary duty to manage the assets prudently, which includes navigating extreme market volatility and a complex set of tax obligations.
The Double-Edged Sword of Volatility
Cryptocurrency prices are notoriously volatile. This creates a significant risk for an estate. The retrieval process can take months, during which time you, as the executor, have no ability to sell or manage the assets. A sharp market downturn during this period could decimate the value of the inheritance.
This exact scenario happened in the high-profile case of Matthew Mellon, an early investor in the cryptocurrency XRP. After his death, his executors struggled to gain access to his holdings. During that delay, the price of XRP crashed, and the estate lost more than half its value—hundreds of millions of dollars—before the assets could finally be secured and liquidated.
How Inherited Crypto Is Taxed in the U.S.
Understanding the tax rules is critical to preserving the estate’s value and ensuring beneficiaries aren’t hit with unexpected tax bills. The IRS treats crypto as property, which has specific implications for inheritance.
Estate Tax: Only for the Very Wealthy
The total fair market value of all the deceased’s assets, including their crypto, is calculated as of the date of death. This total value is subject to federal estate tax. However, this tax only applies to estates that exceed the very high federal exemption limit, which was $13.61 million per individual in 2024. Most estates fall well below this threshold and will not owe any federal estate tax.
Capital Gains Tax and the “Step-Up in Basis”
This is the most important tax concept for heirs to understand. When you inherit an asset like stock or crypto, your cost basis for tax purposes is “stepped up” to the fair market value (FMV) of the asset on the date the original owner died.
This rule is incredibly beneficial. It effectively erases all the capital gains that accumulated during the deceased’s lifetime.
Example of Step-Up in Basis:
- John bought 1 Bitcoin for $1,000 years ago.
- When John dies, that 1 Bitcoin is worth $50,000.
- His daughter, Jane, inherits the Bitcoin. Her cost basis is not $1,000; it is “stepped up” to $50,000.
- If Jane sells the Bitcoin immediately for $50,000, her taxable capital gain is $0 ($50,000 sale price – $50,000 stepped-up basis). She owes no capital gains tax.
If Jane decides to hold the Bitcoin and sells it two years later when it’s worth $70,000, she will only owe capital gains tax on the appreciation that occurred after she inherited it ($70,000 – $50,000 = $20,000 of gain). For inherited assets, this gain is automatically considered long-term.
FAQs: Quick Answers to Common Questions
Can I just use my loved one’s password if I find it? No. This is strongly discouraged. It likely violates the exchange’s Terms of Service and may be illegal. The exchange’s security systems can detect this, freeze the account, and make the official recovery process much harder.
What if the deceased didn’t have a will? Yes, you can still retrieve the assets. State intestacy laws will determine the legal heirs. You will need to go to probate court to be appointed as the estate’s “administrator,” after which you can follow the same process.
How long will this entire process take? Be prepared for it to be slow. Getting appointed by the court can take one to two months. The exchange process can take another one to two months on the fast end, but real-world cases have taken close to a year.
Why can’t I just name a beneficiary on a Coinbase or Kraken account? Currently, major U.S. crypto exchanges do not offer payable-on-death (POD) or direct beneficiary designation features like traditional banks do. This is a developing area, but for now, the probate process is the only way.
What is a “digital executor”? A digital executor is a person named in a will who is specifically tasked with handling digital assets. While not a formal legal title everywhere, appointing a tech-savvy co-executor is a smart move for anyone with significant crypto holdings.
Do I have to pay taxes on the crypto I inherit? No, not on the inheritance itself. Thanks to the “step-up in basis,” you only pay capital gains tax on any increase in value from the date of death to when you sell it.
What if the crypto is on a hardware wallet like a Ledger? No, an exchange cannot help. If the assets are in a non-custodial wallet, the only way to access them is with the physical device, its PIN, and/or the 12-24 word seed phrase. Without those, the assets are lost forever.