You might be wondering…

• Is it enough to transfer the cryptocurrency from one wallet to another, or do I need a written contract?

• How are taxes handled when donating crypto?

• What if the recipient loses their access keys – is the gift gone?

• Can a crypto donation be legally secured to avoid fraud?

Clients ask me

“If I donate bitcoin to my child, do I need to register it somewhere?”
You don’t need to record it in any registry. But I recommend a written donation agreement, which clearly specifies the amount and asset being donated.

“How is a crypto gift valued?”
Usually according to the market value on the date of the donation. This is crucial for tax purposes.

“Can the recipient lose the gift if they forget their password?”
Yes. With cryptocurrencies, lost keys = lost coins. That’s why it’s important that the donation agreement includes provisions on how and in what form access details are delivered.

Donation of cryptocurrencies in a nutshell

• Form: Written form is not strictly required by law, but strongly advisable for evidence.

• Subject of donation: Precise specification (e.g., “1 BTC held in wallet XY”).

• Valuation: Market price on the date of donation.

• Tax effects: Gifts between close relatives are tax-free, but others may trigger income tax.

The biggest risks and common mistakes

1. No written contract – in case of a dispute, you can’t prove what was given.

2. Vague identification of the gift – without details (wallet address, amount), the donation can be unenforceable.

3. Tax risk – people often forget that crypto gifts are still subject to tax rules.

4. Technical loss – if the recipient doesn’t know how to handle crypto, the gift can be lost forever.

Step by step

1. Draft a donation agreement – include type of cryptocurrency, amount, value, and method of transfer.

2. Specify the date of transfer and the exchange rate used to value the gift.

3. Transfer the cryptocurrency – ideally wallet-to-wallet, with a witness or notary present.

4. Ensure safe handover of access details – e.g., on a separate document or via a notary.

5. Review tax obligations – the recipient should know if the gift is exempt.

Real-life example

A client donated 2 ETH to his daughter. They didn’t draft a contract, he just gave her the password to his wallet. She didn’t activate the account, and after three years, when she tried to access the funds, the keys were lost. The donation was then worth over CZK 100,000. Without a contract or proper transfer, the gift couldn’t be proven. The result? Family disputes and irreversible loss of money.

Why not to DIY

Online “free templates” suggest simply transferring the coins. That’s short-sighted. Cryptocurrencies are property like any other, and they require the same legal caution. If you don’t want to risk invalidity or tax penalties, have a professional contract drafted.

Lawyer’s recommendation

Crypto donations are new and not yet fully tested in courts. That’s exactly why extra caution is wise:

• always prepare a written contract,

• hand over the gift securely,

• address tax implications,

• consider the technical side of access.

✅ Checklist:

• Cryptocurrency and amount identified

• Exchange rate fixed on date of donation

• Written agreement signed

• Access credentials securely delivered

• Tax aspects resolved

FAQ

Do I need to report a crypto gift to the authorities?
There’s no central registry, but for tax purposes you may need to document the value of the gift.

Are crypto gifts between relatives taxed?
No, gifts to close relatives are exempt.

How can I prove a crypto donation if there’s a dispute?
The most reliable proof is a written agreement combined with the blockchain transaction record.