Wealthy individuals with significant cryptocurrency holdings are increasingly finding it difficult to place these assets into trust structures due to concerns among trust companies about volatility, money laundering risks, and regulatory uncertainties. Over recent years, a growing number of crypto entrepreneurs, traders, and investors—some of whom acquired wealth through inherited assets converted into digital currencies—have sought to protect their gains via offshore trusts for estate planning and tax advantages. However, trustees and legal advisers report widespread reluctance among trust firms to accept cryptocurrency holdings.

According to practitioners in the field, many trustees remain uncomfortable managing digital assets, largely because of the fluctuating prices and challenges in verifying the legitimacy of the underlying funds. Bitcoin, the largest cryptocurrency by market value, experienced notable price surges during the COVID-19 pandemic and prior to Donald Trump’s second U.S. presidential term, allowing investors to amass considerable capital gains. UK tax data for the year ending April 2025 showed British taxpayers sold £13.8 billion worth of cryptocurrency, with the majority of sales made by men under 45 years old. Nearly 250 taxpayers recorded capital gains exceeding £1 million from these disposals.

Trust companies typically play a key role in safeguarding family wealth across generations and in creating inheritance tax efficiencies. However, the inherent risks posed by cryptocurrencies—such as their price volatility, potential links to illicit activity, and the lack of consistent global regulation—have led many trustees to err on the side of caution. Lawyers representing trusts note the additional burden on trustees to conduct rigorous source-of-wealth checks to ensure digital assets are not proceeds of crime. This process is complicated by the pseudonymous nature of crypto transactions and the absence of fully regulated markets, increasing the perception of risk.

Several legal partners report that younger members of affluent families have increasingly requested their trust companies to hold crypto assets, sometimes prompting concern among traditional fiduciaries. Some of the unease also stems from high-profile failures within the crypto sector, such as the collapse of the FTX exchange and the conviction of its founder, Sam Bankman-Fried, for fraud, alongside the risk of losing access to wallets due to lost keys.

Despite these challenges, a smaller group of trust providers are positioning themselves as specialists in cryptocurrency wealth management. They highlight advancements in compliance technology, including sophisticated tools that help verify the provenance and valuation of digital assets, such as back-testing purchases against asset values. These firms emphasize the importance of thorough, non-formulaic compliance practices carried out by knowledgeable advisers to reduce exposure to risks associated with crypto holdings.

While the majority of trust companies remain cautious, the emergence of specialized services and enhanced screening technology may pave the way for greater acceptance of cryptocurrencies within fiduciary structures, offering an evolving option for wealthy individuals seeking to protect and transfer digital wealth to future generations.