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Crypto Assets

It’s estimated that some 3.3 million people in the UK own some form of digital asset which has value. The most common “digital assets” are cryptocurrencies such as Bitcoin, Ethereum, and other altcoins.

Other emerging assets include Non-Fungible Tokens, known more readily as “NFTs”.

If you hold, own or have some financial interest in digital assets, careful planning is vital to ensure that those assets, and importantly the value in them, is properly managed and protected, for you and your future generations.

From estate planning, wills and administering estates with digital assets, to dealing with disputes involving investment or management of cryptocurrency and other digital assets by investment managers, trustees and others, we can help.

Our expert team of crypto assets lawyers have specific expertise in advising and assisting clients who are faced with any issues relating to digital assets.

 

Free initial consultation

We offer a free, no obligation initial consultation as well as flexible pricing options, tailored to your needs. Please contact us for further information.

Our experience

  • Advice concerning how to effectively pass on cryptocurrency and digital assets on death;
  • Investigating breaches by personal representatives in failing to unlock or secure cryptocurrency or digital assets in deceased persons estates;
  • The administration of estates with digital assets; and
  • Providing talks, seminars and professional training on digital assets.

Key contact

Roman Kubiak is a partner and head of the market leading Contested Wills, Trusts and Estates team. He advises across the whole spectrum of private wealth disputes, with a particular focus on high value, complex and cross-border disputes including: trust disputes, breach of trust claims and applications to remove trustees; will disputes, particularly those with an international element; claims under the Inheritance (Provision for Family and Dependants) Act 1975; and claims for equitable relief under proprietary estoppel, constructive trusts and resulting trusts.

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Your questions answered

What is cryptocurrency?

 

Cryptocurrency is a digital asset with a certain value attached to it which can be exchanged and used much like ordinary currency but notably is not reliant on central authorities, such as a government or bank.

While all digital and most virtual currencies are centralised with supply controlled by the developer of the currency, cryptocurrencies such as Bitcoin are decentralised and not created or controlled by a single central entity. Therefore, supply and value of cryptocurrency is determined by demand.

Instead of being physical money carried around and exchanged in the real world, cryptocurrency payments exist purely as digital entries to an online database describing specific transactions. When you transfer cryptocurrency funds, the transactions are recorded in a public ledger. Cryptocurrency is stored in digital wallets.

If you own cryptocurrency, you don’t own anything tangible. What you own is a key that allows you to move a record or a unit of measure from one holder to another.

There is now some considerable value in certain cryptocurrencies, such as Bitcoin and Ethereum, where that particular currency can be used much like money. The added feature of such currency is the privacy associated to it. You will never know who owns a particular cryptocurrency, only the owner of a private key to access the public key will be able to unlock the value. Some individuals consider such privacy to be an attractive feature, and many take to the idea of decentralised finance i.e., the opposite to our current banking system.

While cryptocurrencies such as Bitcoin have risen considerably in value in the past 10 years – the value of 10 Bitcoin has risen from an average value of £130 in 2012 to £280,000 by the start of 2022 – they are also notoriously volatile and high risk. That can therefore lead to issues, for instance due to poor investment decisions, inability to unlock or lay claim to such assets on someone’s death and overall a lack of transparency.

What are NFTs?

 

The other notable digital asset with particular value is that of a Non-Fungible Token.

Non-Fungible means that the asset is unique and cannot be replaced with something else. Cryptocurrency, on the hand, is fungible – you can trade it for something else.

These assets are anything digital in nature such as digital art or music. Much of the recent excitement in NFTs stems from an evolution of collecting digital art. The value in this context is that NFTs are designed to provide the owner with something that cannot be copied

What issues arise with digital assets?

 

Most often, the issues lie in their susceptibility to fraud, financial volatility, and the difficulties they pose either with ownership in lifetime or in effectively passing on the ownership on death.

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