Cryptocurrency FAQ

Get answers to frequently asked questions about buying Bitcoin and other cryptocurrencies with your Solo 401k and Checkbook IRA LLC

Updated over a week ago

How can I buy bitcoin and crypto with a Solo 401k or Checkbook IRA LLC?

Start by establishing your Solo 401k or Checkbook IRA LLC with Nabers Group. Our team will provide all the required documents needed to buy bitcoin, altcoins and other crypto with your retirement plan.

All of our plans are checkbook-controlled, which means you remain in complete control of your retirement funds and how/where they are invested. Here's an overview of each process:

Checkbook IRA LLC:

  1. Nabers Group establishes your self-directed IRA and forms your Special Purpose LLC

  2. Fund your IRA via rollovers and/or contributions

  3. IRA funds are invested into the LLC you manage/control

  4. IRA funds end up in your LLC bank account

  5. Open crypto exchange account in the name of your LLC

  6. Wire funds from your LLC bank account to your LLC crypto exchange account

  7. Start investing!

Solo 401k Trust

  1. Nabers Group prepares your Solo 401k plan & trust documents

  2. Fund your Solo 401k via rollovers and/or contributions

  3. Open crypto exchange account in the name of your 401k Trust (use your trust tax ID number/EIN)

  4. Wire funds from your 401k trust bank account to your 401k trust crypto exchange account

  5. Start investing!

Can I use any exchange I want?

Yes, you can. However, keep in mind this must be a brand new exchange account. You cannot use a pre-existing account (in your name or your business' name).

Additionally, you must open an institutional, corporate, or business account.

If you have a Solo 401k, the new exchange account must be titled in the name of your 401k trust and use the 401k trust EIN (tax ID number).

If you have a Checkbook IRA LLC, the new exchange account must be opened int he name of the LLC and use the LLC EIN (tax ID number).

Further, many exchanges currently have extremely long processing times. It's not uncommon to wait 4-12 weeks for an exchange account to be approved and opened.

Can I store my crypto in a hardware (cold storage) wallet?

You can, but it's technically complex and there are many ways things can go wrong. If you have previously held crypto in a hardware wallet, this solution may work for you. Check out this article for more details.

Can I use a decentralized exchange?

Yes, you can use a DEX to purchase crypto assets.

Can I use Uniswap, MetaMask or My Ether Wallet to get into smaller market cap coins?

Yes, as long as you are using 401k funds to purchase those assets and storing the crypto in its own dedicated wallet just for retirement funds, this is allowed.

Can I use IRA or 401k funds to buy NFTs?

No, NFT stands for non-fungible tokens. NFTs are considered collectibles which are a prohibited asset class by the IRS. Do not use IRA or 401k funds to invest in an NFT.

Can I stake my crypto or lend it out?

Staking crypto may be OK as long as you are not using any margin (this can trigger UBIT). Never extend any personal guarantees on lending or staking your crypto. Always establish a new lending account (e.g. Nexo or Celcius) in the name of your IRA LLC or 401k trust and using your LLC EIN or 401k trust EIN. Never put IRA or 401k funds into your personally-owned crypto lending account.

Can I use 401k or IRA funds to mine crypto?

Yes, but this will trigger UBIT (Unrelated Business Income Tax). Further, the IRS has not yet ruled or released any advisory opinion if the mining activity is considered running a business. In that case, the 401k or IRA would be prohibited from investing in a business you own directly.

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