Crypto Worth Millions Has Become Permanently Inaccessible. Here's Why

Bitcoin Pizza Day: Crypto has quietly become part of many Indian portfolios.

Bitcoin, Ethereum, NFTs, tokens sitting in exchange accounts or private wallets. Often seen as long-term bets. Often stored and forgotten.

But there is one question most investors rarely pause to consider. If you are not around to access it, can someone you trust?

Unlike bank accounts, mutual funds, or fixed deposits, crypto does not come with a relationship manager, a branch office, or a standard recovery process.

Access depends entirely on one thing: the private key. And that changes how inheritance works.

Prateek Gupta, Head of Business at Mudrex, explains that crypto wallets function very differently from traditional financial products.

Access is binary. Either the private key works. Or it doesn't. If that key is misplaced or unavailable, the assets remain visible on the blockchain but cannot be moved.

Estimates by Chainalysis suggest that Bitcoins worth at least $2.3-$3.7 million are already permanently inaccessible. A significant portion of this is linked not to theft, but to lost access and the absence of succession planning.

Zakhil Suresh, Founder & CEO of BitSave, says this is not a theoretical concern anymore.

He has been in the crypto space since 2014 and says one of the biggest risks he has seen is families losing access to genuine wealth simply because no one else knew the access phrases or private keys existed.

Traditional finance, he notes, has multiple recovery layers -- banks, nominees and depositories.

Crypto works differently.

If access credentials are not documented properly and shared securely with trusted family members, the assets can become permanently inaccessible.

According to him, the industry has already simplified crypto investing significantly. The next phase, he says, is "custody literacy" -- helping investors understand not just how to buy crypto, but how to securely store it, access it, and eventually pass it on.

Where Succession Laws Fall Short

Gupta points out that laws such as the Indian Succession Act, 1925 and the Hindu Succession Act, 1956 were written long before digital assets existed.

Even though the Madras High Court recognised crypto as property, the procedural question remains unanswered: how does a nominee or heir actually access a private wallet without the key?

Legally, heirs may have a claim. Operationally, they may still be unable to access the asset.

Vikaas M Sachdeva, CEO of BitDelta India, says this is where investor awareness becomes crucial. Self-custodial wallets offer complete control. But they also place the entire responsibility of key management on the investor.

There is no recovery mechanism if access details are not preserved properly.

Custodial platforms, on the other hand, may offer structured processes that can help families in unforeseen circumstances, but only if the investor has taken the right steps.

He believes education and informed decision-making are central to responsible crypto ownership.

Sumit Gupta, Co-Founder at CoinDCX, says inheritance planning for digital assets is still an overlooked aspect of investing.

One of the biggest risks is informal sharing or unsafe storage of private keys. To address this, platforms like CoinDCX offer a nomination facility, allowing users to designate a trusted individual who can initiate the transfer process through official support channels if required.

While not mandatory, he describes nomination as a best practice in digital asset management and succession planning.

Misconception Around Cold Wallets

Ashish Singhal, Co-Founder at CoinSwitch, notes that many retail investors assume cold wallets are always the safest option. However, if private keys are misplaced, funds typically cannot be recovered.

FIU-registered custodial platforms, he says, provide regulated frameworks and documented recovery processes that become especially important during inheritance situations.

CoinSwitch has already assisted many families in recovering assets through legal and compliance routes - something not possible with inaccessible private wallets.

Practical steps investors should consider:-

• Document your crypto holdings clearly
• Store seed phrases and private keys in a secure physical format
• Inform a trusted person about where this information is kept
• Include crypto details in a will or sealed estate document
• Register nominees on exchange platforms
• Consider multi-signature wallets or specialist custody for large holdings
• A new asset class needs a new kind of planning

Crypto offers independence and control. But it also requires a different approach to succession. As digital assets become a meaningful part of wealth portfolios, succession planning needs to evolve with them.