Crypto With No Seed Phrase: Is the Money Simply Gone?

What happens to cryptocurrency — bitcoin or anything else — when the owner dies in the UK depends almost entirely on one thing: where the coins were held. If they sat on an exchange, an executor can usually claim them like any other account. If they sat in a private wallet and the only record of the seed phrase has died with the owner, the honest answer is that the money is very likely gone for good, and no legitimate firm can change that.

The two cases could hardly be more different, so it is worth working out which one you are in before you do anything else. An exchange — Coinbase, Binance, Kraken and the rest — is a company that holds the coins on the customer's behalf and can be asked to release them. A self-custody wallet, secured by a seed phrase or private key, has no company behind it at all: whoever holds the phrase holds the money, and nobody else can reach it.

One thing is true in both cases, and it catches families out. HMRC still counts the holding as part of the estate and values it at the date of death, even where the coins cannot be reached. This guide separates what an exchange will release from what self-custody loses forever, explains the tax position, and sets out how to find out whether there was any crypto at all.

The short answer: it depends where the coins were held

Cryptocurrency is not, by itself, mysterious to deal with. It is property, and property passes to the estate. What makes it different from a bank balance is that access to it does not depend on a company's records — it depends on a secret. On an exchange, the company keeps that secret for the customer and can be persuaded to hand the value over. In self-custody, the customer kept the secret themselves, and if they took it with them, the value is stranded where it sits.

So the first job is not to grieve the money or to chase it, but to establish which kind of holding you are dealing with. The answer decides everything that follows, and getting it wrong — assuming an exchange holding is lost, or assuming a private wallet can be reopened — wastes time and, in the second case, exposes the family to people who prey on exactly that hope.

Crypto held on an exchange: what an executor can claim

An exchange that serves UK customers is a business with a bereavement process, much like a bank. It cannot let the family log in and operate the account — the terms forbid it, and it will not hand over passwords — but it can close the account and release the value to the estate.

Expect it to ask for the death certificate, proof that you are the personal representative (a grant of probate, or confirmation in Scotland), and identification. It will then usually either transfer the holding or sell it and pay the proceeds to the estate account, according to its own procedure. The process can be slower and more paperwork-heavy than a bank's, partly because the firm may be based abroad and partly because the sums can be volatile, but the route exists and it works.

One wrinkle is worth flagging: an exchange registered outside the UK is, in estate terms, an asset held abroad, and occasionally a foreign process is needed alongside the UK one — the same issue that arises with an overseas property, which we cover in the guide to why a Spanish apartment needs a Spanish probate too. Ask the exchange early what it requires from a UK estate, because the answer shapes how long it takes.

Watch, too, for balances that are not sitting idle. Coins that were staked, lent out, or locked into a fixed-term product on an exchange may take longer to release and can carry notice periods, so ask the exchange to confirm the full position across every product the account held, not just the headline balance. The estate is entitled to all of it, but an executor has to know it is there to claim it.

Self-custody: why a lost seed phrase means it is gone

Self-custody is the case that breaks hearts. A private wallet — whether an app, a piece of software, or a hardware device such as a Ledger or Trezor — is protected by a seed phrase, usually twelve or twenty-four words, from which the private keys are derived. That phrase is the only way in. There is no company holding a copy, no "forgotten password" link, and no reset.

If the seed phrase, the private key, or a written recovery record can be found, the wallet can be restored and the estate can deal with the coins. If none of those can be found, the coins remain visible on the blockchain forever and reachable by nobody, including the family, the executor and any expert. This is not a gap that cleverness closes; it is the entire design of the system. Trying to guess the phrase is futile, and on a hardware device repeated wrong attempts can wipe it entirely, destroying even the slim chance that the right record turns up later.

That is why the sentence families dread — "the money is simply gone" — is, for a genuinely lost self-custody wallet with no recovery record anywhere, usually true. It is kinder to say so plainly than to leave a grieving person believing a solution exists.

Be wary of anyone promising to recover a lost wallet

Because that hope is so strong, it is targeted. A whole cottage industry of "crypto recovery" firms advertises to people who have lost access, and a bereaved family that has found a hardware wallet with no seed phrase is a particular target. Some take an upfront fee and deliver nothing. Some are a second fraud aimed at people already out of pocket from a first one.

The rule of thumb is simple: if a wallet's seed phrase is genuinely lost, no third party can recover it, so anyone guaranteeing that they can is either mistaken or lying. Legitimate help exists only where there is something real to work with — a partial phrase, a corrupted file, a device that still holds the keys behind a forgotten PIN — and even then it is specialist and cautious, never a guaranteed unlock advertised to strangers. Before parting with any money or information, treat the promise as a scam until it proves otherwise, and take independent advice.

HMRC still counts it in the estate

Here is the part that feels most unfair. HMRC treats cryptoassets as property for inheritance tax, which means the holding is valued at the date of death and included in the estate — whether or not the family can actually get to it. In the worst case, a valuable but permanently locked wallet inflates the value of the estate, and the tax on it, without providing a penny to pay that tax with.

If the estate is large enough to be liable for inheritance tax, this is not a theoretical worry, and it needs proper advice rather than guesswork. An executor must value the estate accurately, so an unreachable holding still has to be identified, valued and declared; it cannot simply be ignored because it is stuck. Free, government-backed guidance on valuing an estate is available from MoneyHelper, and where a locked holding pushes the estate over the tax threshold, a solicitor or tax adviser should be involved to deal with HMRC on the point.

How to find out whether there was any crypto at all

Often the hardest question is not how to claim the crypto but whether any existed. People are private about it, and there may be no statement in the post to give it away.

Look for the trail. Exchange accounts leave emails — search the inbox for the names of the big exchanges, and for words like wallet, deposit and verification. Payments to and from an exchange show up on bank statements, so read them back over a year or two. On the phone and computer, look for exchange apps and wallet apps, and for a browser extension wallet. In the house, a hardware wallet looks like a small USB stick, and a seed phrase is often written on paper, on a metal backup plate, or tucked inside a safe or a document folder. Notifying the banks and finding the accounts go hand in hand here, and our guide to which banks the free Death Notification Service reaches helps with the account side of the search.

Crypto also belongs to the wider category of digital things that a family cannot easily continue or close, from online accounts to a website nobody can renew — the practical problems overlap, as the guide to domain names, hosting and a website nobody can renew shows. The common thread is that access, not ownership, is the obstacle.

If you are reading this with your own crypto in mind, the lesson for the people you would leave behind is to remove the guesswork now. Leave a written note of which exchanges you use and where any wallet and its recovery record can be found, kept somewhere safe and known to your executor — but never write the seed phrase itself into your will, because a will becomes a public document once probate is granted, and anyone could then empty the wallet. A sealed letter of instruction stored with the will, pointing to the recovery record rather than containing it, is the safer arrangement.

This is also the argument for not relying on a volatile or potentially unreachable asset to protect the people who depend on you. Level term life cover pays a fixed lump sum that does not rise, fall or vanish with a wallet, and reaches your family whatever happens to your other holdings. If you want that certainty sitting behind everything else, you can get life insurance quotes through an FCA-authorised broker, subject as always to underwriting.

Scotland and Northern Ireland

Crypto is treated as property across the whole of the United Kingdom, so an exchange's requirements and HMRC's valuation rules do not change from one nation to another. What changes is the estate machinery the executor works through. In Scotland, the personal representative obtains confirmation rather than a grant of probate, and an exchange will accept that as the equivalent authority.

In Northern Ireland the estate process differs again, and there is no Tell Us Once service, so more of the notifying falls to the family — the guide to notifying everyone after a death in Northern Ireland sets out who you have to tell yourself. None of these differences affects the central point: an exchange holding can be claimed, a lost self-custody wallet cannot, and HMRC counts both. For the full run of tasks, the hub on bereavement admin, assets and contracts brings the related guides together.

Frequently asked questions

Can a UK exchange release crypto to an executor?

Yes. Exchanges serving the UK have account closure processes for a customer who has died, and will transfer or sell the holding for the estate once they have the death certificate, proof of your appointment and your identification. The account itself cannot be operated by the family directly, and the process is often slower and more paperwork-heavy than a bank's.

Is crypto in a private wallet recoverable without the seed phrase?

No. A self-custody wallet has no provider who can reset access. Without the seed phrase, the private key or a written recovery record, the holding cannot be reached by anybody, including recovery firms making bold claims. Search paper records, devices and safes carefully before concluding it is genuinely lost.

Does HMRC count crypto in the estate?

Yes. HMRC treats cryptoassets as property for inheritance tax, so the holding is valued at the date of death and included in the estate even where the family cannot reach it. Take advice if a valuable but unreachable holding pushes the estate over the tax threshold, because the tax is still assessed on it.