Experts reveal everything you need to know about passing down and inheriting digital assets.
In the last two years, the global user base for crytpocurrencies has increased by nearly 190 per cent in terms of traded volumes. A survey by Statista of consumers across 55 countries ranks consumers in the UAE 19th most likely to be an owner of cryptocurrencies, such as Bitcoin, in 2020.
But unlike ‘fiat currency’ such as the dollar or the dirham, which can be easily passed on, exchanged, or used for transactions, we are yet to gin an understanding of what will happen to digital currency their owner dies. We know of instances where assets have been lost forever- in 2019, a crypto exchange lost $145 million after its CEO suddenly died and no one had access to the password of the digital wallet.
Safekeeping of passwords is important and equally important is letting your loved ones know about them. “It’s a question that has been bothering me for some time. I have investments worth $100,000 in various crytocurrencies. I have bought these through a broker and not directly from the exchange, which allows me to nominate a beneficiary. So, I am guessing if my wife wants to have access to it when I am gone, she should be able to. But I am not sure of the procedure. I am yet to safekeep my cryptocurrencies in a digital wallet; they are just lying in my account for now, which I know can be vulnerable to cyberattacks. I plan to explore more and make my cryptos more safe and secure and also let my better half know,” says Bawa K., who has been investing in digital currency since 2017.
How are cryptos bought?
Cryptocurrencies can be bought ‘peer to peer’ from people, directly from organisations ‘over the counter’ who offer their own tokens for sale, or from public exchanges such as Coinbase, Bittrex, Binance, Bithumb, Huobi, etc.
“These are the channels for most of the people to get and sell cryptocurrencies. And there are many other ways to get digital assets, for example, C2C(customer to customer) transferring, which are usually not used much,” says Ola Lind, Director, SoBitX.
How are they stored?
The cryptocurrencies are based on blockchain technology and stored in a so-called wallet. Each wallet corresponds to a pair of keys, a public key and a private key. The public key is used as an address to receive coins and the private key is used to identify the owner.
“Each owner should keep the private key safe. Anyone with this private key can access the assets in this wallet,” says Lind.
“In terms of storage, cryptocurrencies are stored in digital wallets. An individual has a range of choices in that regard, which include holding their digital assets in wallets on exchange, in software wallets such as metamask, or in hardware wallets such as Trezor or Ledger. In all cases, the individual must make their own judgment in terms of security and accessibility,” says Blaise Carroz, Vice President, Global Acquisition, Idoneus.
UAE law on digital currencies and wills
“While legally, the answer is yes, dependents can seek to claim digital assets, similar to any other type of asset, if your passwords, passphrases, and key locations die with you that probably won’t happen. Without those things your crypto assets will be inaccessible,” says Carroz, when asked if families could inherit their loved ones’ cryptocurrencies after they died.
Under the UAE Federal laws, the status of crypto is currently not sufficiently clear to be certain about adding crypto to one’s will. “However, a UAE resident can use a DIFC Will so that it covers all his worldwide assets, include crypto assets. This is possible since DIFC applies the laws of England and Wales, which recognises crypto assets as property. DIFC Wills also have a provision for including a ‘sealed’ document so that potentially one may leave a private key for the beneficiary to receive and use to retrieve the crypto,” advises Carroz.
“As with all things of this nature it is best to consult a professional law firm for advice for drafting wills with crypto elements due to the complexities involved,” adds Carroz.
When including digitally held assets in an estate planning instrument, Century Maxim recommends the following to be outlined in an estate planning instrument:
a. A clear list of the digitally held assets
b. Information of the digital wallet(s)
c. A memorandum of including the passwords and PINs
d. A step-by-step guide explaining how the beneficiaries can access those assets upon the execution of the estate planning instrument
“Without access to the identifiers to access the exchange or wallet, it would be near impossible to access the assets irrespective if it is briefly mentioned under an estate planning instrument. In such a case, it is more likely than not that the digitally held assets are under a highly secure and encrypted network — a feature for which investors of currencies such as Bitcoin, Ethereum, or recently the Dogecoin opt for because it is so difficult to intercept,” says Farhat Ali Khan, Managing Partner, Century Maxim International, a legal consultancy firm licensed based in Abu Dhabi.
Suneeti Ahuja Kohli
Suneeti Ahuja-Kohli has been in Dubai long enough to call it her spiritual home. She loves to travel but plans to settle down in Koi Samui, Thailand eventually to spend her sunset years by the sea. For now, she writes frequently on personal finance, retirement planning, business news and features, health and almost anything assigned by her editor. Her sojourns can be followed on instagram (suneetiahujakohli), news and views on Twitter @suneetiahuja, and for the rest, there’s a Facebook account.
UAE, Austria sign Comprehensive Strategic Partnership agreement
Declaration launches a new stage of cooperation between the two countries. His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, and Sebastian Kurz, Federal Chancellor of the Republic of Austria, today attended the signing of the Comprehensive Strategic Partnership between the UAE…
Declaration launches a new stage of cooperation between the two countries.
His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, and Sebastian Kurz, Federal Chancellor of the Republic of Austria, today attended the signing of the Comprehensive Strategic Partnership between the UAE and Austria.
The joint declaration made by the two countries reaffirms their commitment to expanding their relations and launching a new stage of cooperation to achieve their shared goals and drive growth in their countries.
The agreement was signed by Dr. Sultan bin Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology, and Alexander Schallenberg, Austria’s Minister of Foreign Affairs, in the presence of Sheikh Hamdan bin Mohamed bin Zayed Al Nahyan; Sheikh Mohammed bin Hamad bin Tahnoun Al Nahyan, Chairman of Abu Dhabi Airports; Mohamed Mubarak Al Mazrouei, Under-Secretary of the Crown Prince Court of Abu Dhabi, Ibrahim Salem Al Musharakh, UAE Ambassador to Austria, Mag. Gernot Blumel, Austria’s Minister of Finance, and Dr. Margarete Schramböck, Minister for Digital and Economic Affairs.
Below is the full text of the joint declaration:
Areas of Focused Cooperation
Bollywood: Shilpa Shetty files case against media houses
Actor Shilpa Shetty has filed a defamation suit in Bombay High Court against 29 media personnel and media houses, accusing them of “false reporting and maligning her image” following the arrest of her husband Raj Kundra in a case connected with creation and distribution of pornographic content. The hearing in Kundra’s case is scheduled for…
Actor Shilpa Shetty has filed a defamation suit in Bombay High Court against 29 media personnel and media houses, accusing them of “false reporting and maligning her image” following the arrest of her husband Raj Kundra in a case connected with creation and distribution of pornographic content.
The hearing in Kundra’s case is scheduled for Friday.
Shetty urged the high court to issue a “permanent and mandatory injunction restraining the defendants, (themselves and through their servants, agents, assigns and/or any person claiming by or through them) from making and/or publishing and/or reproducing and/or circulating and/or speaking and/or communicating, any derogatory and defamatory statements.”
She also requested the court to issue a mandatory order directing the defendants to forthwith delete and/or remove the defamatory articles and the defamatory videos from their respective websites and social media platforms and to issue an unconditional apology.
The petitioner is also seeking a mandatory order “directing the defendants to issue a clarificatory statement and an unconditional apology in their respective websites and elsewhere where the defamatory statements are contained stating that the defamatory articles and defamatory videos were published without ascertaining the veracity or the genuineness of the statements and hence, are baseless, unsubstantiated and unwarranted”.
The defendants be ordered and directed to pay to the plaintiff (Shilpa Shetty) an amount of Rs20 crore (200 million) together with interest thereon at 18 per cent per annum from the date of filing of the suit until payment and/or realisation, read the plea.
The actor also sought for passing appropriate directions requiring Facebook, YouTube and other social media platforms to remove or delete or take down the defamatory articles and defamatory videos.
Shetty’s husband Raj Kundra was arrested by police on July 19 along with 11 other people on charges related to the alleged creation of pornographic films. Kundra has been named as the key conspirator by the Mumbai Police which has slapped charges against him under Sections 420 (cheating), 34 (common intention), 292, and 293 (related to obscene and indecent advertisements and displays) of the Indian Penal Code (IPC) besides relevant sections of the IT Act and the Indecent Representation of Women (Prohibition) Act, said the police.
Mumbai Crime Branch on Tuesday said that actor Shilpa Shetty has not yet been given a clean chit in the pornography racket case where her husband and businessman Raj Kundra is the prime accused.
“Shilpa Shetty has not been given a clean chit yet. All the possibilities and angles are being probed. Forensic auditors have been appointed and they are looking into the transactions of all the accounts in this case. This audit may take some time as it is a lengthy process but until the audit is complete, no clean chit to anyone,” the officials had said.
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