Top 5 questions you should ask yourself when considering digital currency as an investment strategy.
Updated: Jun 25, 2021
Question 1: Should I be leery of digital currency marketers?
As a self-directed IRA custodian, Preferred Trust Company provides clients with the ability to invest in alternative investments through a Self-Directed IRA. The investments allowed are determined by the Internal Revenue Service (IRS). As a self-directed IRA custodian, Preferred Trust Company does not represent itself as anything other than a licensed and regulated Trust Company that holds custody of alternative investments. Custodians are not in the business of selling investments.
Because alternative investment custody services align with alternative investments, we work with independent digital currency brokers that market and sell digital currency to mutual clients. Digital currency dealers do have some clever tactics to drive the purchases of digital currency. Buyer beware, some digital currency brokers represent themselves as being a custodian, going as far as using IRA in the company name and representing that they offer a Bitcoin IRA. Some would say that the company name should not matter, but it does if the sale to follow is deceitful or misleading in nature. For the record, there is no such thing as a Bitcoin IRA. There are two types of IRAs as defined by the IRS, a Traditional IRA and Roth IRA. Yes, there are SEP and SIMPLE IRAs, but they are treated as a Traditional IRA, as a tax-deferred vehicle. Nowhere in the IRS publications are you going to find a Bitcoin IRA.
“Some would say that the company name should not matter, but it does if the sale to follow is deceitful or misleading in nature. For the record, there is no such thing as a Bitcoin IRA."
The saying “your reputation is everything” is how Preferred Trust Company has been able to weed through the deceitful or misleading digital currency brokers in the industry. We do this by requiring an in-take call with all clients to ensure that clients are aware of the roles of the digital currency broker and the self-directed custodian, along with the subsequent fees involved with both parties.
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