Does Power of Attorney Cover Bitcoin

Power of Attorney Scope for Bitcoin Assets

This memo is published by CustodyStress, an independent Bitcoin custody stress test that produces reference documents for individuals, families, and professionals.

What Power of Attorney Documents Typically Grant

Power of attorney documents grant agents the authority to act on behalf of principals in financial and legal matters. When someone becomes incapacitated or simply wants another person to handle their affairs, these documents enable that delegation. A question arises for bitcoin owners: does power of attorney cover bitcoin? This question contains two distinct inquiries that often get conflated—whether the legal document grants authority over bitcoin as an asset, and whether that authority enables practical access to bitcoin held in self-custody.

This memo examines the uncertainty surrounding power of attorney coverage of bitcoin and why the answer depends on factors that extend beyond the document itself. Legal coverage and practical capability operate in different domains. A power of attorney may very well cover bitcoin as a matter of law while providing no pathway to actually move bitcoin as a matter of cryptographic reality. Understanding this distinction reveals why the coverage question resists simple yes-or-no answers.

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What Power of Attorney Documents Typically Grant

Power of attorney documents come in many forms, granting different scopes of authority. Some grant narrow authority over specific transactions or assets. Others grant broad authority over all financial matters. Durable powers of attorney remain effective even after the principal becomes incapacitated, while ordinary powers of attorney terminate when incapacity occurs. The specific language in each document determines what the agent can and cannot do on the principal's behalf.

Traditional financial powers granted through these documents include authority over bank accounts, investment accounts, real estate, business interests, and similar assets. These categories developed when assets lived in institutions that could recognize and respond to legal authority. When an agent presents a valid power of attorney to a bank, the bank examines the document, confirms its validity, and then grants access to accounts as the document directs. The document bridges the gap between the principal's rights and the agent's access through institutional mediation.

Older power of attorney forms often use language that predates bitcoin and does not mention it specifically. Terms like "securities," "personal property," or "financial assets" might or might not encompass bitcoin depending on how courts and institutions interpret them. Newer forms sometimes include explicit references to digital assets, cryptocurrency, or virtual currency, but even this explicit language does not guarantee that the coverage question is resolved. The language addresses legal scope but not operational reality.

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Legal Coverage as an Ambiguous Question

Whether a given power of attorney document legally covers bitcoin depends on its specific language, the jurisdiction where it operates, and how courts might interpret ambiguous terms if disputes arise. A document granting authority over "all financial assets" might include bitcoin under one interpretation and exclude it under another. A document mentioning "digital assets" might clearly include bitcoin or might be argued to refer only to digital accounts at institutions rather than self-custody cryptocurrency.

Jurisdictions vary in how they treat digital assets in estate and agency law. Some states have adopted legislation specifically addressing digital asset access and management, potentially affecting how power of attorney documents interact with bitcoin holdings. Other states lack such legislation, leaving the question to common law interpretation and case-by-case judicial reasoning. An agent relying on a power of attorney to access bitcoin faces different legal landscapes depending on where the document was executed and where the bitcoin holder resides.

Even when legal coverage seems clear, practical disputes can arise. Beneficiaries or other interested parties might challenge an agent's authority to deal with bitcoin specifically, arguing that the principal never intended the document to cover this particular asset or that the document's language is insufficient. These challenges may have little merit but can still create delays, legal expenses, and uncertainty during the period when the agent is trying to act. The coverage question may remain contested even when the agent believes it is settled.

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Institutions and the Coverage Question

When bitcoin is held at an exchange or custodial service, the coverage question operates more like traditional asset coverage. The exchange is an institution that can examine legal documents and make decisions about access. An agent presenting a valid power of attorney to a cryptocurrency exchange enters into a process similar to presenting one at a bank—the institution reviews the document, assesses its validity and scope, and then either grants or denies access based on its policies and the document's terms.

Exchanges vary in how they handle power of attorney documents. Some have established procedures for recognizing them and transitioning account access to authorized agents. Others have minimal or no procedures, leaving agents to negotiate with customer service representatives who may be unfamiliar with such situations. The exchange's policies, rather than the document's legal scope, often determine whether practical access occurs. An agent with a clearly valid document may still face rejection if the exchange lacks mechanisms to process it.

Self-custody bitcoin presents an entirely different situation because no institution exists to receive and evaluate the power of attorney document. The document has nowhere to go. No entity stands ready to examine it and grant access accordingly. The question of whether the document covers bitcoin becomes abstract when there is no one to present it to. Legal coverage exists in principle but operates in a vacuum with respect to actual access.

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The Gap Between Coverage and Access

For self-custody bitcoin, power of attorney coverage—even if legally clear—does not create access. Access requires possession of cryptographic materials: seed phrases, hardware wallets, PINs, passphrases. These materials do not materialize because a legal document says the agent has authority over them. Either the materials were shared with the agent before the need arose, or they were not. The document's existence does not change this fundamental fact.

An agent with a valid power of attorney covering bitcoin faces the same technical barriers that anyone without the cryptographic materials faces. The blockchain does not read legal documents. It does not evaluate whether someone has proper authority. It responds only to valid cryptographic signatures. The agent's legal standing may be perfect while their technical position remains impossible. They have the right to act but not the ability.

This gap between coverage and access creates a distinctive kind of failure. The principal may have believed their power of attorney addressed bitcoin. The agent may believe they have authority to manage it. Both may be correct as a matter of law. Yet the bitcoin remains inaccessible because legal authority and technical access are not the same thing and were never connected during the principal's capable lifetime. The document created authority; nothing created access.

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What Coverage Means Without Access

When coverage exists but access does not, the power of attorney provides certain limited benefits. It may authorize the agent to search for cryptographic materials among the principal's belongings without the search constituting trespass or unauthorized access to the principal's property. It may authorize the agent to hire technical specialists to attempt recovery, spending the principal's funds to pay for such services. It may provide legal standing to pursue remedies if someone else has taken the bitcoin improperly.

Coverage without access also creates accountability. The agent authorized to manage an asset may bear responsibility for what happens to it, even if they cannot actually control it. If the bitcoin is lost, stolen, or moved by someone else, questions may arise about whether the agent took proper steps to protect it. The power of attorney may create duties the agent cannot fulfill because the necessary access was never established.

From the principal's perspective, having power of attorney coverage without corresponding access represents incomplete planning. They may have intended for their agent to manage their bitcoin during incapacity. They may have assumed the legal document would be sufficient, as it would be for bank accounts and brokerage accounts. The distinction between institutional and self-custody assets escaped their attention or the attention of whoever drafted their documents. The gap between coverage and access emerged from assumptions that held for other assets but fail for this one.

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Scenarios Where Coverage Questions Arise

An individual becomes incapacitated suddenly, and their spouse presents a durable power of attorney to various financial institutions. Banks comply. Brokerages comply. The spouse knows bitcoin exists because they have seen the hardware wallet, heard discussions about it, or found records of purchases. They attempt to access the bitcoin and discover they have no technical means to do so. The power of attorney that worked everywhere else accomplishes nothing here. Whether the document "covers" bitcoin becomes irrelevant when no institution exists to acknowledge that coverage.

In another situation, someone attempts to use a power of attorney to access bitcoin held at an exchange. The exchange's customer service requests documentation. The agent provides it. The exchange's legal or compliance team reviews the documents over several weeks. Eventually, they conclude that the power of attorney's language does not explicitly cover cryptocurrency holdings, or that it was executed in a jurisdiction whose documents they do not recognize, or that additional documentation is required. The coverage question is decided by an institutional gatekeeper whose standards may differ from what a court would require.

A third scenario involves family disputes about whether the power of attorney was ever intended to cover bitcoin. Perhaps the principal shared bitcoin access with one family member but named a different family member as agent under the power of attorney. The agent claims authority over the bitcoin. The person with access disputes this, arguing that the principal specifically excluded bitcoin from the document's scope or that the principal's intentions were different from what the document says. The coverage question becomes contested, with the actual access holder effectively able to ignore the dispute by simply refusing to cooperate.

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Why Clarity Remains Elusive

Clarity about whether power of attorney covers bitcoin remains elusive because the question spans two systems that do not communicate with each other. The legal system can determine, given sufficient time and resources, whether a particular document grants authority over a particular asset category. Courts can interpret language, apply precedent, and render judgments. But those judgments have force only where institutions or individuals recognize and respond to legal authority. Self-custody bitcoin exists outside that framework by design.

The hybrid nature of bitcoin ownership compounds the confusion. Someone might hold some bitcoin at an exchange and some in self-custody. The power of attorney might effectively cover the exchange-held portion while being practically useless for the self-custody portion. The same document, the same asset class, the same agent—but entirely different outcomes depending on how the bitcoin is actually held. This inconsistency makes it difficult to give simple answers to what seems like a simple question.

Legal reform addressing digital assets in power of attorney statutes may clarify the coverage question over time, but such reform cannot solve the access problem. Even the clearest legal language confirming that power of attorney covers bitcoin does not create the cryptographic materials needed to move it. Coverage and access are separate problems requiring separate solutions. Answering one does not answer the other, and the question people ask typically conflates them.

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Assessment

The question of whether power of attorney covers bitcoin contains two distinct inquiries that resist unified answers. Legal coverage depends on document language, jurisdiction, and interpretation—factors that vary and may remain contested. Practical access depends on possession of cryptographic materials—a technical requirement that legal documents cannot satisfy. An agent may have clear legal authority over bitcoin while having no ability to actually access or move it.

For exchange-held bitcoin, the coverage question operates more like traditional asset coverage, with institutions serving as gatekeepers who evaluate documents and grant or deny access based on their policies. For self-custody bitcoin, no such gatekeeper exists, and legal coverage exists in a vacuum with no mechanism to translate authority into action.

The gap between coverage and access represents a failure mode that standard power of attorney planning does not address. Principals may believe their documents provide for bitcoin management. Agents may believe they have authority to act. Both may be correct legally while the bitcoin remains frozen practically. The question does power of attorney cover bitcoin points to this gap without resolving it, because resolution requires addressing technical access separately from legal authority.

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System Context

Examining Bitcoin Custody Under Stress

POA Bitcoin Custody Ambiguous as a Drafting Gap

Bitcoin Power of Attorney Requirements

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