Cryptocurrency IRA companies: what they are and how they work
A cryptocurrency IRA company offers a retirement account that can hold crypto, held by a qualified custodian. It is not FDIC insured or SIPC protected.
Vahe HakobyanEditor-in-chief
Updated Oct 6, 20263 min readFact-checked
On this page
- The IRS requires a qualified custodian to hold IRA crypto.
- Compare annual fees, minimums and custody terms before you choose.
- Crypto IRAs are not FDIC insured or SIPC protected.
- Traditional IRA withdrawals are generally taxed as ordinary income.
- Private keys can disqualify the account from IRA tax treatment.
These companies offer self-directed IRAs, which allow alternative investments. All IRA types, including traditional, Roth, SEP and SIMPLE, can be self-directed.
What is a crypto IRA company?
A cryptocurrency IRA company gives you a retirement account built to hold crypto. It may be the custodian or connect you to one. A custodian is a qualified trustee that holds IRA assets and files IRS reports.
How do you open and fund one?
The IRS requires a qualified custodian to hold crypto in a self-directed IRA, so you do not take the private keys yourself. You apply with the custodian, then fund the account by transferring an existing IRA or rolling over a workplace plan. Keep the money moving directly between custodians.
What fees and custody limits apply?
Compare the annual account fee, trading fees and any asset-holding fee. Look at the minimum deposit and minimum balance. The custodian decides which cryptocurrencies it makes available, so asset lists differ. Some companies are not custodians and only connect you to a qualified custodian.
How is it taxed versus a taxable account?
An IRA can have tax advantages, but it is not automatically tax free. Traditional IRA withdrawals are generally taxed as ordinary income, except for the portion from nondeductible contributions. Qualified Roth withdrawals are generally tax free. In a taxable account, buying crypto with US dollars is not taxable, but trading one crypto for another, a stablecoin included, or paying with crypto is.
Frequently asked questions
If the failed company is not the custodian, your crypto stays with the custodian for your account. If the custodian itself fails, the assets should be segregated, but you may need a receiver or a successor custodian.
Usually yes. Ask the new custodian to pull the assets over in a trustee-to-trustee transfer so the IRA tax treatment continues.
No. The FDIC covers bank deposits and SIPC covers brokerage accounts, but neither covers crypto held in an IRA.
