Topic: Self-Directed IRA investing in Bitcoin (Read 6277 times)

A buddy of mine has been using Broad for years and loves them too.

I tried to use BitcoinIRA.com.  I went through all the paperwork, moved all the money from my T.Rowe ROTH IRA to them and got ready to buy Bitcoins.  All of the sudden they said they would not do business with me because I had traded on LocalBitcoins.com and they have a policy of not doing business with anyone they can show has done business with LocalBitcoins.com.

So I got all my money back.

I then went to Broad Financial and they are great.  I am so glad that BitcoinIRA.com turned me down!!!  Broad Financial is a much better deal:

1) The flat fee at Broad Financial is less than the percent fee I would have paid BitcoinIRA
2) At Bitcoin IRA they hold the private keys to the Bitcoins, with Broad Financial I hold the private keys to my Bitcoins and they have nothing to
do with them!
3) At BitcoinIRA you can only buy Bitcoins and a few other cryptos.  With Broad Financial I can hold ANY crypto, gold, silver, stocks, bonds, pretty much anything allowed by the IRS.
4) With BitcoinIRA you must use their one broker to buy the cryptos.  This is the broker that will not do business with anyone who has ever traded on localbitcoins.com.  With Broad Financial you buy the cryptos (or gold or whatever) using checks in the checking account of your IRA which you have access and control over.

There is no question, Broad Financial is the better plan.

Equity Institutional would not accept my stash of Bitcoins as a portion of my accreditation; they claimed they could be someone else's Bitcoins and they were letting me "borrow" them.  Meanwhile they did accept scanned or electronic copies of various investment statements (which could have easily have been forged).

How could one truly "prove" they qualify?

Haha. Nice, yeah I wish I was an earlier adopter 

From what I hear, they don't verify it?  I think you can also claim you have more than a networth of 1mil. Maybe you were an early btc investor

From what I read, to be able to purchase you have to make over 200,000/year and make a minimum investment of 25,000. I could almost make the 25,000 investment, but they would laugh at me when they find out how much a year I make I'm a Pastor

Have you contacted this list?
"Several of these IRAs – PENSCO, EnTrust, Equity Institutional, and Millennium Trust, are now listing the BIT as an investment option. "   (It's linking back to the SecondMarket BIT fund)

No; apparently not one custodian will touch this yet except for accredited investors working through SecondMarket.  Continue to watch for ETFs.

My thought is traditional IRAs are at greater risk than Roth IRAs of being seized.  One approach is to convert to Roth IRAs now; pay the taxes but avoid the penalties.  This is especially good to do now in advance if the income tax rate is going to go up high enough.  If you are worried enough then withdraw paying taxes and penalties.  I'm not that worried yet.

Diversify; remain alert; act quickly when the time comes.

David - Has any progress been made on this? I don't have a big IRA, but I am getting worried that the G0vt is going to start seizing people's IRAs and I would rather control my IRA then the G0vt. Would love to hear where we are at with this.

Cetera Investment Services LLC (most recent approval date) -- no answer

On a lark I called the good folks at PWMCO, LLC https://www.pwmco.com/ first (why should I work the list alphabetically?) -- although they are certainly aware of Bitcoin, they are not involved with it yet.  I was their first inquiry.

Is anyone else willing/able to help call other entities?

http://www.irs.gov/Retirement-Plans/Application-Procedures-for-Nonbank-Trustees-and-Custodians

http://www.irs.gov/pub/irs-tege/nonbank_trustee_list.pdf

I think the best solution is to withdraw your funds and if you can't claim the "I'm paying for college" exemption on the penalty--just pay the penalty (and taxes)! If you're looking at holding your BTC for 10 years, you'll either have zero left in your account (If BTC fails), or you will have well exceeded the performance of the "market". I don't think there is really any middle ground here. My money is on bitcoin surviving and doing very well.....
Also, by just withdrawing money from your IRA and dealing with the penalty you won't have to comply with any self-directed IRA silliness and you gain the benefit of complete control of your wallet's security.

http://www.thehardmoneypros.com/self_directed_ira_custodians.shtm working this list now.

My lawyer pointed me at Equity Trust and Pensco but just like US Trust and Provident, neither of them are handling Bitcoin at this time.  Their legal departments need the IRS to state their position; just like any other currency investment or collectable.  Collectables cannot be held by a custodian in trust for a self-directed IRA.

Apparently it can be costly and time consuming to get an IRA Letter of Determination.  We need a Bitcoin Angel http://venturebeat.com/2013/05/28/60-angel-investors-rally-forces-and-raise-6-7m-for-bitcoin-startups/ to step up.

My CPA is checking into the procedure for creating our own custodian dedicated to Bitcoin.  We will need a lawyer familiar with SEC rules, etc.  If I manage to get a custodian created then it could be the custodian for everyone else's IRAs but not my own (maybe).  I need someone else to get a custodian created too for me and then we could compete.

With just one custodian a 2 of 2 multisig would work ok.  The custodian would be one of the signers and of course the IRA owner would be the other; neither could transact without both.  The risk is the custodian might fail.  To address this an IRA owner could choice a premium arrangement with two custodians.  In that case 3 of 4 multisig would be perfect; if one custodian fails then at least the owner and the remaining custodian could transact.

I might need more funding than I can afford by myself.

This idea (my efforts/work) to date is utterly free for the taking.  If/when things get more valuable, e.g. legal documents, etc., then I *might* want to keep it private but I'm hoping not.  Zillions of custodians just seems like the Bitcoin way to me.

My Merrill Lynch rep indicates he is aware of Bitcoin but checked and reports Merrill Lynch is not doing anything at all with it yet.  What's needed is the IRS position; is it an investment just like foreign currencies *or* is it a collectable?

US Trust indicates that one must have $3,000,000 in order to open a trust account with them that *might* be able to get us into Bitcoin.  So, we keep looking.

What we're all waiting for is an ETF that holds bitcoins as its asset. This would be done by an existing financial services company that already has the infrastructure in place (Vanguard, iShares, etc.)

Then keeping bitcoins in an IRA would be as simple as buying the ETF with funds in your IRA account.