Challenges of Current Cryptocurrency Recovery Solutions

Before diving deeper into the GenWealth solution, let’s better understand the already available solutions for cryptocurrency recovery and their limitations. Through customer research, we’ve gathered some of the most common options Cryptocurrency users utilize to leave their crypto wealth to their families, but all these options present serious risks.

There are third-party services you can use to keep your seedphrase and share it with your family whenever you pass away, but it requires you to trust intermediaries with your seedphrase. How safe is that? You subject yourself to a lot of third-party risks that are completely outside of your control, such as an information breach, weak processes, faulty or poor security of the seedphrase or your personal data, and such a provider will be prone to several attacks as the rewards of getting access to several seedphrases from a single heist will be very enticing for attackers. In addition, in practice, you will be sharing unlimited access to your wealth with this third party, and no matter how small, there is a risk they can spend part or all of your crypto. A rogue employer could get access to clients' seedphrases and run away, or worse if intimated by the government they would be required to share your seedphrase with the government. These services can also become quite expensive over the years. Another option is to store your seed phrase in a specific location like a vault, and share the location and access with your family. That is also a very risky option. Sharing the location of your seedphrase is not safe, as there is a real chance the people you trust might end up sharing it with someone else either by mistake or because they trust them a lot. There can also be other more extreme situations where your trusted family members need the money and might sell your crypto with the intent to pay it back late. These are just a few examples of how this could go wrong but I’m sure you can think of many more examples of how sharing full access to your wealth with another person could go wrong.

On top of all those issues, this method incurs the real risk that with time, your family might forget the details of how to access your seedphrase, and might no longer be able to recover it when the times come. This is extremely likely, especially if they are not crypto-savvy, and are not familiar with how cryptocurrency self-custody works.

Even if you’re lucky and this flawed and risky method works well because nothing happens to your crypto while you are alive and your family has access to the seedphrase to recover the crypto, once you’re gone. You still need to make sure that they are aware of how to set up a wallet, find an exchange that is compatible with the tokens you hold and that is secure, create an exchange account if they don’t have one, sell the tokens in the exchange and withdraw the money from the exchange to the bank account. It’s a very steep learning curve if your heirs are unfamiliar with Crypto and the responsibility of teaching them everything they need to know beforehand falls onto you. You probably need to go through this process with them multiple times until they feel comfortable because just leaving a paper or document with instructions will likely not be enough unless they are extremely tech-savvy. And once again, even if you teach them all of this, are you sure they will remember it when the time comes?

Finally, another option is to give up on your self-custody and have an institution or individual that could make sure your crypto is sold and delivered to your family whenever you pass away, that way you do not need to be worried about seedphrases. However, in the past, there have been reports of employees of crypto custodians losing the crypto they were holding in the name of their clients. There is always this third-party risk that can happen as a result of an honest mistake or a malicious attack. Centralized entities in our industry have a long story of problems and scandals. Are you willing to lose all the benefits and empowerment that come with self-custody, and subject yourself to such a risk?