Power of Attorney for Crypto Assets: Staying Capable of Acting When It Matters

The risk: assets frozen during your lifetime

If the holder of crypto assets becomes legally incapable, nobody can validly dispose of the holdings – not even spouse or children. Without a power of attorney, the guardianship court must appoint a custodian (sec. 1814 BGB), who then faces the same practical problem as heirs: without access data, self-custodied crypto assets are effectively frozen – even when funds are needed for care costs or market risks call for rebalancing.

The solution: a power of attorney with crypto clauses

A lasting power of attorney (sec. 1820 BGB) avoids court-ordered custodianship: a person you trust acts for you directly. For crypto assets, the deed should expressly authorise the attorney to

• access digital assets, wallets and accounts with trading platforms,
• manage wallets, rebalance or sell holdings,
• receive and safekeep access data, hardware wallets and backup media,
• make declarations towards custodians, platforms and service providers.

The notarial form is advisable for several reasons: it provides strong evidence of the principal's identity and capacity, is accepted by banks and platforms, and – unlike private documents – new execution copies can be issued if the original is lost. The notary also advises on scope, conditions and controls (such as dual-control for large dispositions).

Custodianship directive as a complement

Should a court custodianship nevertheless become necessary, a custodianship directive names the person the court should appoint – ideally someone with technical understanding of crypto assets or with instructions to retain expert help.

The technical concept belongs with it

As with the will: access data do not belong in the power of attorney itself. The deed grants the legal authority; actual access is secured through a separate custody concept – sealed envelope, safe deposit box, distribution among trusted persons or multi-signature solutions. More in the article Safeguarding private keys and seed phrases.

General or special power of attorney for crypto assets?

A general power of attorney covers all asset and personal affairs and thus in principle also digital assets. In practice, however, platforms and custodians often accept only powers that expressly name the crypto powers. A general power with a clearly worded crypto addendum has therefore proven effective – or, where only this area is to be governed, a dedicated special power. Both should expressly include the power to access wallets, to manage and sell, and to receive access data.

Transmortal and postmortal power of attorney

A power that continues beyond death (transmortal) or only becomes effective on death (postmortal) can ease the transition: the attorney remains able to act before a certificate of inheritance or the opened will is available – particularly with crypto assets, where quick action to secure holdings can be important. Such powers do not replace the inheritance arrangement; they must be aligned with the will and access concept, and the heirs can in principle revoke them.

Protection against misuse and controls

Because a crypto power effectively opens access to potentially substantial value, protection against misuse is part of the structuring: deposit of the power with clear release conditions, dual-control for dispositions above certain thresholds, accounting duties or the appointment of a supervising attorney. This preserves the ability to act without creating uncontrolled access.