Blackbeard’s Blockchain

If this story is reminiscent of Pirate treasures buried in the Caribbean in the 17th Century, that’s because it is.

The booty, in this case, cryptocurrency and other blockchain-based assets, is hidden through private keys that act as password-like secrets granting their owners access.  There’s even a term, “cold storage,” that refers to this method of securing virtual wealth.  Most often, key holders put their secrets on computers disconnected from the Internet (to avoid hackers), in safety deposit boxes or hidden in the ground.  Buried treasure anyone??!

The story reaches a climax when I tell you that billionaire Matthew Mellon died under suspicious circumstances in April 2018.  In this semi-apocryphal practice, he locked up $190 million in crypto funds.  The exchange owner put all of the private keys in cold storage, without instruction on how to access them!  More than 115,000 account holders were impacted.  Mellon spread his holdings across multiple locations, under different pseudonyms. While his estate is probated in California, a significant portion of the state is hidden and can’t be located.

It’s important to note that crypto is only one type of digital asset.  Any content or accounts stored or managed on computers and devices are considered digital assets, including files on cloud services.

In this cryptocurrency era, it’s increasingly important to keep an inventory of digital assets as well as understanding what’s transferable.  A Last Will and Testament may require sections to address digital assets and directions on how to locate them (X marks the spot).  It’s not ideal to have friends and family running around looking for secret codes buried in the yard.

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With over 50 years of combined experience, our probate, estate planning, real estate, elder law and asset protection attorneys provide peace of mind for our clients throughout South Florida.

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