Crypto Tracing for Bankruptcy & Estates

Trustees, receivers and executors increasingly find cryptocurrency among the assets they are responsible for, and blockchain tracing can help identify it, account for its movements and document the record for the court or beneficiaries.

Why crypto is hard to find in bankruptcies and estates

A fiduciary's first job is to find out what exists. With cryptocurrency, that can be hard. Holdings may be spread across exchanges, self-custody wallets and hardware devices, with no central register and, in many cases, poor records. For US tax purposes the IRS treats digital assets as property, and in bankruptcy the estate generally includes all legal or equitable interests of the debtor in property as of the commencement of the case. Crypto is part of the picture, whether or not anyone has written it down.

The large crypto bankruptcies show how difficult this can be. In the FTX chapter 11 cases, the debtors reported to the Delaware bankruptcy court that they found a pervasive lack of records showing where fiat and digital assets could be found or accessed, and extensive commingling of assets. In the Celsius cases, the Southern District of New York bankruptcy court held in January 2023 that, under the platform's terms of use, crypto deposited in "Earn" accounts was property of the estate. Ownership can turn on documents as much as on the blockchain.

Situations that commonly call for tracing include:

A debtor or decedent known to have held crypto, with incomplete schedules or inventories
Transfers out of known wallets shortly before a filing, appointment or death
Company funds and insider funds moving through the same wallets
Assets held on a platform that has itself failed or restricted withdrawals
Questions from creditors or beneficiaries about what happened to digital assets

What tracing can show for trustees and executors

Holdings: balances at identified addresses as of a relevant date, such as the petition date, appointment date or date of death
Transfers: outflows from known wallets, with dates, amounts and destinations, which counsel can review when considering possible avoidance or misappropriation claims
Exchange touchpoints: deposits at identifiable exchanges and custodians where account records can be requested or compelled
Timelines: a dated reconstruction of activity before and after key events
Commingling: where estate, customer or insider funds passed through shared wallets

What tracing can’t do for an estate

Tracing can show that funds exist at an address; it cannot give anyone control of them. Access to self-custody wallets depends on private keys or recovery phrases, and if those are lost, the assets may be visible but unrecoverable. Identifying the person behind an address generally requires off-chain records. Privacy coins, mixers and some cross-chain services can limit a trace. Whether a given asset belongs to the estate is a legal question that may depend on contracts, terms of service and applicable law.

Evidence that helps find crypto in an estate

Exchange account statements, login emails and two-factor authentication apps
Tax returns, including any Form 1099-DA. US custodial brokers report gross proceeds on Form 1099-DA for sales on or after January 1, 2025
Company books, bank statements and treasury records showing transfers to or from exchanges
Known wallet addresses, hardware devices and any securely stored recovery information
Computers, phones and cloud accounts, preserved and handled under counsel's direction

For decedents' estates, we recommend that executors avoid attempting to access unfamiliar wallets or devices without guidance, since mistakes can cause permanent loss.

How ChainWatch works with counsel

We begin with a case review to review what is known and advise whether tracing is likely to help. Complex matters are scoped and quoted in advance. We work for the fiduciary or their counsel, and can operate under a neutral follow-the-asset mandate where the fiduciary needs an impartial account rather than an advocate's view.

Findings are delivered in written reports suited to filing with the court or sharing with creditors and beneficiaries. Where a matter involves multiple wallets, chains or incidents, we handle it as one engagement. Litigation support, including declarations and expert reports, is available on a retainer or hourly basis if tracing leads to contested proceedings. Engagements are confidential.

Crypto in bankruptcies and estates: common questions

My relative died holding crypto and we don’t know the wallet details. Can it be recovered?

Start with the records: exchange statements and login emails, two-factor authentication apps, tax returns (including any Form 1099-DA), bank transfers to or from exchanges, and any devices or securely stored recovery information. For assets at an exchange, contact the exchange about its process for estates; account records can also be requested or compelled through legal process. Assets in a self-custody wallet need its private keys or recovery phrase: without them, the crypto may be visible on the blockchain but impossible to move. Don’t try to access unfamiliar wallets or devices without guidance, because mistakes can cause permanent loss.

Is crypto held on a failed platform part of the bankruptcy estate?

It can be, depending on the platform’s terms. In the Celsius case, the bankruptcy court held in January 2023 that crypto in “Earn” accounts was property of the estate under the terms of use. See our guide to staking and earn program risks.

Can you tell us everything the debtor or decedent owned?

We can trace from what is known. Wallets with no connection to any known address, account or record may not be discoverable from the blockchain alone.

Can you help recover assets from a wallet with no keys?

No. We can confirm balances and history, but we cannot access a wallet without its keys.

Can your report support an avoidance or misappropriation claim?

Our reports document transfers, timing and destinations. Whether those facts support a claim is for counsel to assess.

Do you work for trustees in other countries?

We are US-based. Please contact us to discuss cross-border matters.

Request a case review

ChainWatch is a blockchain-forensics firm, not a law firm, and does not provide legal advice. We do not determine property rights, creditor entitlements or estate distributions. Tracing results depend on the available data, and we cannot guarantee that assets will be located, accessed or recovered.

Sources

The information on this page was checked against the sources listed in September 2026. Laws, agency guidance, company policies and contact details change, so please verify the current information with the original source before you act.