An increasing number of individuals who have accumulated wealth through cryptocurrency trading, token investments, and digital asset businesses are incorporating offshore trusts into their family wealth arrangements. According to the Financial Times, citing lawyers and trust advisors, demand for such structures has risen noticeably recently, but trustees willing to directly accept cryptocurrency assets remain scarce.
Trusts are commonly used to separate assets from an individual’s personal property, facilitating intergenerational wealth transfer. In some jurisdictions, such arrangements can also help reduce estate tax burdens. For holders of crypto assets, the challenge is not whether there is demand, but whether they can find professional institutions willing to take custody of these assets.
Trustees are more concerned about custody and liability.
The report noted that trustees' concerns regarding crypto assets primarily focus on three areas: high price volatility, elevated custodial risks, and more complex verification of fund sources. Unlike traditional securities or bank accounts, digital assets are often dispersed across wallets, exchanges, and various service providers, with longer historical transaction chains.
Charlie Tee, a partner at the law firm Withers, said that only a small number of trustees he has encountered are willing to hold cryptocurrency. Some clients sell their tokens first and then place the cash into a trust, but even then, some trustees continue to scrutinize the source of funds.
The report also stated that younger generations of high-net-worth family members are increasingly demanding that trust assets be allocated to cryptocurrencies. This places greater pressure on trust companies, as trustees must act in the best interests of both current and future beneficiaries, not just the person who established the trust.
The size of cryptocurrency wealth in the UK is increasing.
As digital asset prices have risen over the past few years, the amount of cryptocurrency entering wealth transfer arrangements has also increased. According to data from HM Revenue & Customs, UK taxpayers disposed of £13.8 billion in cryptocurrency assets in the year ending April 2025.
Among them, nearly 250 taxpayers reported cryptocurrency capital gains exceeding £1 million. A newer set of data shows that during the 2024 to 2025 tax year, 17,600 taxpayers declared £1.38 billion in taxable cryptocurrency gains, with 240 individuals collectively reporting £717 million in gains, each exceeding £1 million in personal earnings.
The UK tax authority is also stepping up scrutiny. According to data cited by the accounting firm UHY Hacker Young, around 81,000 warning letters were sent last year to cryptocurrency investors suspected of underpaying taxes.
Private key inheritance has become a real-world issue.
Once crypto assets are included in an estate plan, another practical issue is how heirs can gain control of the wallet. Self-custody wallets rely on private keys or recovery methods; if the owner passes away without leaving an executable plan, the assets may be permanently inaccessible.
Therefore, a comprehensive crypto estate plan often includes not only legal documents but also access methods to wallets, private key storage, and instructions for beneficiaries. The report mentions that in August, David Schwartz, a Ripple board member and co-founder of the XRP Ledger, proposed an inheritance solution: entrusting two identical Bitcoin hardware wallets to two trusted relatives, and giving the shared PIN code to another trusted contact to disclose after the owner’s death.
The FTX incident continues to influence industry judgment.
Industry risk events over the past few years have made traditional trust institutions more cautious. Charlie Tee noted that the collapse of FTX and the possibility of investors losing access to their wallets are risks that trustees have repeatedly evaluated.
FTX filed for bankruptcy in November 2022, after which market attention to exchange custody, wallet ownership, and proof of reserves significantly increased. However, for trust companies, the issue is not merely where assets are held, but rather that trustees may face legal liability if investment or custody decisions are mishandled.
Reports indicate that some professional trust companies have begun offering services for digital assets, and compliance technology is advancing. Andrew Horbury, CEO of Cavenwell Group in the UAE, said screening tools can now track transaction histories and help trustees verify the origins of crypto wealth.
Even with technological improvements, many institutions still prefer to receive cash from the sale of crypto assets rather than holding tokens directly in trust. For most traditional trustees, the core issue remains: whether it is appropriate to hold assets with such high price volatility when fulfilling the duty of preserving family wealth over the long term.