Our goal and intent is to support these events.
However, we make no guarantees to do so. (Read the full policy here.)
Clients that want more control over participation in these events may explore establishing a trust or single-member LLC inside their IRA.
As an alternative asset custodian we pride ourselves on our ability to say “yes.” Want to hold a fire truck in your IRA? Yep, we can help you with that. Timber rights? Sure, no problem.
Our general rule is that clients can hold any asset inside their Choice account — so long as the asset is not expressly prohibited by the IRS inside of retirement accounts and it passes a compliance review.
When it comes to digital assets, however, this can become more complicated. Beyond our primary concern of safeguarding clients’ assets, many other considerations come into play:
Technology — do we have the capabilities and service providers in place to hold a particular asset on clients‘ behalf?
Tradability — if we are able to custody the asset, do we also have access to liquidity venues where clients will be able to trade in or out of their positions?
Operational — does the asset present any unique or complicating factors that would require changes to our policies, procedures, processes or tech stack in any way?
Compliance — are there any compliance or legal considerations for the asset beyond typical checks?
When it comes to forks, these questions can become even more difficult to answer — especially before the fork occurs.
So when clients ask if we are supporting a particular fork, it can feel like we’re stuck between a rock and a hard place. Our goal is to support these events and say “yes” to clients; however, we can’t always do so without some serious tradeoffs.
This is why we have structured our policy the way the that it is — while our goal and intention is to support these events, we make no guarantee to do so. For some clients this can be a dealbreaker, which we understand and respect.
There are other strategies these clients can explore that can give them more control over digital assets in their retirement account, and thus their ability to participate in these events — such as establishing an investment trust or single-member LLC inside their IRA.
These strategies come with other considerations and tradeoffs — like setup time, annual fair market value reporting, and possible tax implications. Clients should do their own research and consult with their tax professional before pursuing one of these strategies. However, if being able to participate in every blockchain fork they desire to is the primary concern, then the benefits of being able to do so may outweigh the drawbacks and complexities of these approaches.
If you’re interested in pursuing one of these strategies, there are many service providers who can help you setup one of these entities and answer any questions you may have. But make sure you allow yourself enough time to do so — especially if you need this completed before a certain date — because they typically take about a month to set up.