Wealthy cryptocurrency investors and entrepreneurs are increasingly looking to offshore trusts as a way of preserving their fortunes for future generations and limiting exposure to inheritance tax.
But trustees remain cautious about accepting digital assets because of their sharp price movements, the difficulty of securing them and the need to establish where the money came from.
Lawyers and trust advisers told the Financial Times they were receiving more enquiries from people who had built wealth through crypto trading, token investments and digital asset businesses. Many now want to place part of those holdings, or the proceeds from selling them, into more conventional trust arrangements.
A trust can separate assets from an individual’s personal estate and allow wealth to be passed between generations. The tax treatment depends on the structure and the jurisdiction, but some arrangements can reduce exposure to inheritance taxes.
The challenge for crypto holders is finding a trustee willing to take responsibility for the assets.
Charlie Tee, a partner at Withers, told the Financial Times that only a small proportion of the trustees he had dealt with felt comfortable holding cryptocurrency. In some cases, clients sell their tokens and transfer the resulting fiat currency into a trust instead. Even then, trustees may remain cautious about accepting the money.
Ronald Graham, a partner at Winston Taylor, said younger members of wealthy families were increasingly asking for trust assets to be invested in cryptocurrency. Some trust companies had hesitated because they are responsible for protecting property on behalf of both present and future beneficiaries.
Rising crypto wealth reaches estate planning
The number of people facing these decisions has grown as major cryptocurrency gains have created a new group of wealthy investors.
Figures from HM Revenue and Customs cited by the Financial Times show that UK taxpayers disposed of £13.8 billion in crypto assets in the year to April 2025. Most of those disposals were made by men under the age of 45.
Nearly 250 taxpayers reported capital gains of more than £1 million from crypto disposals during that period.
More recent HMRC figures showed that 17,600 taxpayers declared £1.38 billion in taxable crypto gains in the 2024-25 tax year. Of those, 240 investors each reported gains of more than £1 million, together accounting for £717 million, according to previous crypto.news coverage.
The tax authorities have also increased scrutiny of the market. About 81,000 warning letters were sent during the previous year to crypto investors suspected of paying too little tax, according to figures from accounting firm UHY Hacker Young cited in the report.
Passing crypto wealth to heirs presents a separate practical problem. Ownership often depends on access to private keys, and assets held in a self-custody wallet can become permanently inaccessible if the owner dies without leaving a reliable recovery process.
A crypto estate plan may therefore need to cover wallet access, private keys and detailed instructions for beneficiaries, as well as the legal documents required to transfer ownership.
David Schwartz, a Ripple board member and XRP Ledger co-creator, highlighted a similar concern in August. He proposed an inheritance arrangement involving duplicate Bitcoin hardware wallets. Under his suggestion, two trusted relatives would hold the wallets, while trusted friends would separately keep the shared PIN and disclose it after the owner’s death.
Trustees weigh legal and investment risks
Access to the assets is only one concern for professional trustees.
Trustees have fiduciary duties to beneficiaries and are expected to preserve trust assets over long periods. Those responsibilities can apply not only to the person who established the trust, but also to their children, grandchildren and beneficiaries who have not yet been born.
Claire Randall, a partner at Farrer & Co, told the Financial Times that trustees accepting crypto-related wealth would need to investigate how the money used to acquire the assets had been obtained. They would also have to make sure it was not connected to criminal activity.
That investigation can be more difficult when funds have passed through several wallets, exchanges and other digital asset services, particularly if the transactions took place outside regulated financial institutions.
The volatility of cryptocurrency creates another risk. If a trustee accepts a concentrated holding and its value later falls substantially, beneficiaries could question whether the decision was consistent with the long-term purpose of the trust.
Self-custody has made the issue more prominent across the crypto market. In such arrangements, investors control their own private keys rather than relying on an exchange or intermediary to return their assets. If the keys are lost, access to the holdings can be lost permanently.
A trust introduces another party responsible for managing that access while also meeting legal and fiduciary obligations.
FTX collapse continues to influence decisions
Previous failures in the cryptocurrency sector have added to the caution among trust companies.
Tee cited the collapse of FTX and the risk that investors could lose access to their wallets as examples of the dangers trustees consider.
FTX filed for bankruptcy in November 2022 after a liquidity crisis exposed problems involving customer assets and its relationship with trading firm Alameda Research. The collapse prompted investors and institutions to reassess how cryptocurrency was stored and who ultimately controlled it.
It also increased attention on independent custody, wallet ownership and measures such as proof of reserves. Such a system can provide evidence of an exchange’s on-chain holdings, but it cannot establish every off-chain liability or guarantee that a company is solvent.
Trustees face additional responsibilities because they may be legally accountable for investment and custody decisions made for beneficiaries.
Some specialist trust companies have begun promoting services for digital assets. At the same time, compliance technology has improved the ability to investigate the history of cryptocurrency transactions.
Screening tools offer greater visibility
Andrew Horbury, chief executive of UAE-based Cavenwell Group, told the Financial Times that screening tools could trace transactions and help trustees establish how cryptocurrency had been acquired.
The technology can examine trading histories and compare them with the value of the assets being considered for a trust. This gives providers another method of assessing the source of a client’s crypto wealth.
That information can support source-of-wealth and anti-money laundering checks. However, Horbury was speaking as traditional trust companies continued to consider whether they were willing to accept cryptocurrency directly.
Some providers are more comfortable taking cash from a crypto sale than holding tokens within a trust. Others remain wary of the proceeds if confirming their origin would require years of digital asset transactions to be reconstructed.
For trustees, the key consideration remains their responsibility to beneficiaries. Even when the source of the cryptocurrency can be verified and a secure custody arrangement is available, they must still decide whether an asset capable of large price swings is compatible with their duty to preserve wealth over the long term.
