Crypto 2

You’ve weighed the pros and cons and decided that you want to invest in cryptocurrency - an emerging and exciting asset class.  After digging in you realize that unlike other established asset classes like stocks and bonds, buying crypto requires some technical savvy and you begin to worry, "If I screw this up, I might lose my investment!"

Well, fear not – I am going to walk you through the safest possible way to buy and hold cryptocurrencies directly. My methods may seem like overkill in some ways, but trust me, this approach significantly reduces the chance losing your investment through user error, hacking, or even poor estate planning.

Note: If you are serious about investing in crypto, please call  GuideOn Legal Services so we can help you through the process I am about to explain: 703-397-7490. Our on-staff technical and legal crypto experts are standing by to assist. 

Preliminary steps:

  • Before buying any crypto, I want you to establish a separate and secure email account that you will only use for your cryptocurrency accounts and transactions. 
  • I highly recommend Protonmail – a secure email service with built-in end-to-end encryption and state-of-the-art security features.
  • When setting up your Protonmail (or other secure email) account, create a completely random email address like "[email protected]"  I made that up by hitting random keys on my keyboard but you get the idea, no personally identifiable information.

Establish an Exchange Account:


  • Just like buying stocks or bonds, you have to choose an exchange account through which you will buy your crypto
  • Use only large, established exchanges such as Coinbase, Kraken, or Binance.US. I personally prefer Coinbase as the most secure option. However, I often use Kraken (excellent security features) and Binance (broad offerings) if I can’t find the crypto I’m looking for on Coinbase.
  • Important: Do not use brokerage accounts to buy your cryptocurrency (unless you are fabulously wealthy and trading in large amounts).  Brokerage accounts often will not allow you to transfer your crypto outside of their insular ecosystem, which means you will not be able to send your crypto to other people, or to safer storage options (which we will get to in a minute).  Examples of brokerage providers include Robinhood and Sofi, among others. I would also avoid using peer-to-peer (P2P) payment transfer apps like Paypal or Cash App to buy crypto for the similar reasons. Of course, there are pros and cons to each approach, but for the average user, exchanges are the way to go.
  • When setting up your account, you’ll be asked to provide personal information to verify your identity.  Just like a bank, a crypto exchange must know who its customers are to comply with government regulations and to dissuade the use of its accounts for criminal purposes.  It is normal to provide this verification information. Just be sure that you go to the crypto exchange site directly (not through a link or email....not even the ones I just provided) to avoid being scammed.

Secure and Fund Your New Account:


  • Once your new account is established, you will need to secure it with two factor authentication (TFA) and then fund it in order to make your first crypto purchase.
  • Secure itIn your account's security settings, turn on TFA/MFA. I highly recommend using a physical security key like a Yubico device instead of SMS (text code) or other "soft" options.  A Yubico security key (or similar device) requires that you insert it into your mobile device or computer to verify identy, often with a biometric component. Yubico claims that using a security key brings your chance of account takeover down to  ZERO, versus SMS (24%), email (21%), or phone call verification (50%).  It's certainly the most secure TFA available today. In fact, you should be using this technique for any account you have that supports it (e.g., Google, 1Password, etc., etc.) Tip: I bought two in case I lose one - just be sure to register both on every account and keep the spare in your safe or other secure location.
  • Fund it: The most common way to fund your crypto exchange account is by linking a bank account to your exchange account for ease of transfer. 
  • Important: Do not link your primary checking or savings account to your crypto exchange account. Instead, open another free checking account which you will use for crypto funding only. This allows you to keep that account empty until you are ready to buy some crypto.  When the time comes for your purchase, you simply transfer the needed amount from your main checking account to this crypto checking account, and then transfer that amount to the crypto exchange for the purchase. This turns a one-step process into a two- or three- step process, but it takes just minutes to execute and it’s worth the additional security. Just be sure to open the crypto checking account at the same bank as your primary accounts to allow for instantaneous transfers.

Buy Some Cryptocurrency

  • Once your exchange account is funded, you can make your first crypto purchase.
  • Upon completion, you will see your newly purchased crypto sitting in your exchange account or exchange account wallet.
  • Be sure to immediately enter the purchase information into a spreadsheet (or favorite accounting software) for tax purposes   Keep very careful records of each and every crypto transaction and transfer you make, including date, quantity, type, fees, purchase price, etc. – the more detail the better.
    • Come tax time, if you fail to maintain proper records, the IRS likes to pretend you received your crypto for free (price = zero) and you will be taxed on the entire amount. Don’t skip this step. And don't put it off till later.  Some exchanges do not carry your order information for more than 30 or 60 days, some not at all!

Secure your investment


  • The number one security error people make is leaving their crypto sitting on the exchange account after purchase. Exchanges are good at helping you buy your crypto, but many are not good at protecting it from hackers.
  • Instead, I recommend transferring your crypto assets to either cold (preferred) or hot storage. 
  • Cold storage means transferring your crypto to an encrypted device that is not connected to the internet in any way. This massively reduces the chance that your crypto will be stolen by hackers. There are a number of cold storage devices on the market, the two most popular being Ledger and Trezor.
  • Hot storage means transferring your crypto to a web or mobile-based wallet. This is (sometimes) more secure than leaving your crypto on an exchange but less secure than the cold storage option noted above. There are more hot wallet options out there than there are stars in the sky, so tread carefully in making your choice. Exodus and Metamask are popular choices.
  • Whichever option you choose, when you set up your device/wallet, you will be asked to generate your private keys, which will be the sole means of accessing your crypto device/wallet. The keys are comprised of 12 to 24 words that you will jot down on a piece of paper.  These words represent an encrypted number that is so large that it is truly unfathomable. While nearly impossible to hack (unless you ignore the next two bullets), whoever has it, has access to your crypto.
  • For this reason, you will never enter your private keys (the 12-24 words) into your computer, mobile phone, or any other device that ever touches the internet in any way. Nor will you ever take a picture of your private keys (pictures often go right to the cloud). 
  • This where things get a little old school but necessary to protect and preserve your keys. First write your private keys on paper and store them in your safe. Then, immediately purchase a metal wallet or punch tablet (check out Keystone, formerly Cobo), which provides a fireproof/nearly indestructible option. Again, keep your keys in your safe or other secure location.
  • If you lose your keys, you lose your crypto. Don’t lose your keys. No one will save you.
  • Depending on the wallet/device you choose, you may also be asked to generate a PIN to access the wallet device. Treat the PIN in the same way as your private keys (as described above)
  • Once you've done all this, your ready to transfer your crypto from the exchange where you bought it to your newly established cold or hot wallet.  You must be careful here -- make sure that you are transferring your crypto to the right wallet address. Your wallet will have different receiving addresses for each type of crypto and if you send crypto to the wrong address (e.g. trying to send Bitcoin to a Bitcoin Cash address), you could lose it forever. Check, double check and triple check the address before you hit the send button.  The first time you do this, your heart will pound in your chest as you wait for the transaction to go through. It doesn't take long but it's nerve-racking.  However, once you do it successfully, you will be impressed with the speed, control, and efficiency of these decentralized transactions and, like everything else, you'll gain mastery with usage. Tip: On my first transfer, I sent a small amount of crypto from the exchange to my wallet just make sure it worked. This was wasteful in terms of fees, but it may give you some peace of mind on your first transaction (I do not recommend transferring larger sums until you know what you are doing....and maybe not even then).

Crypto Wallet

Cryptocurrency and Estate Planning

  • Cryptocurrency and NFTs (non-fungible tokens) are a new and evolving asset class. As such they must be uniquely handled in your estate planning documents in order to preserve them during incapacity, or pass them along to your loved ones as you head through the pearly gates.
  • While user error and hacking/theft are two of the biggest risks to your crypto assets, poor crypto asset estate planning is next on the list.  Why? Because, if you become incapacitated or pass away, it is unlikely that your loved ones will know how to locate and access your crypto assets. If that occurs, your assets will go forever unclaimed.
  • The estate planning aspect of protecting your crypto is too complex for this article, so please reach out to a GuideOn Legal Services attorney ( once you own any crypto or NFTs. We can immediately assist in integrating these assets into your estate plan (will, trust, power-of-attorney). And we will provide a unique and safe mechanism through which your executor/trustee can access your crypto assets in accordance with your estate plan.

Bonus Advice

  • If you wish to own crypto but avoid all the complexity of direct ownership that I’ve described above, there are indirect, but more costly, investment options available in the market place. Some popular examples are Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), Bitwise 10 Crypto Index Funt (BITW), Valkyrie Bitcoin Strategy (BTF), among others. Many additional options are pending SEC approval, but it could take a while. 
  • Another common indirect investment strategy is to buy stock in companies involved in the infrastruture of the cryptocurrency industry, such as crypto exchanges, mining, chipmakers, banking, security, and blockchain analysis. 
  • Disclaimer:  I am a lawyer, not an investment advisor. These are just examples for those who wish to look into this industry further.  That being said, I am wholly committed to the legal and technical protection of your assets. By providing top quality, modern estate planning and tax strategies, I can help you pass these unique assets along to your loved ones if you become incapacitated or kick the can (or just feel like giving it away). Whether or not you should invest in crypto in the first place is something you have to decide for yourself, or with the help of a financial advisor.
  • Lastly, if you are already into crypto and love talking about it online with other laser-eyes, please use good OPSEC and do not discuss your personal holdings, wallets, private keys, PINs, or security methods in these forums. This attracts attention from hackers and should be avoided.  In direct comms with friends, use an encrypted messaging service like Signal, as it is open source and encrypted (and has applications for both desktop and mobile)

Call GuideOn Legal Services today!

If you need any help with this process or with ensuring your crypto assets are properly integrated into your estate plan, call or email GuideOn Legal Services at 703-397-7490 or use the contact form on this page.

Recommended additional reading: “CYA -- Cover Your Digital Assets!



The author is GuideOn Legal Services (GLS) founder Jack Grimes, a military veteran, former Intelligence Community executive, and JAG Corps Reserve Officer with over 18 years of experience. He is among a limited number of attorneys in the country with an LL.M. (Master of Laws) in Estate Planning. The GLS motto  Live Long, End Strong® epitomizes the full life-cycle approach Jack takes to estate planning and asset protection. It starts with the end in mind, and then builds a lifetime and legacy plan, culminating in the peace of mind that comes with protecting your family's future by preserving assets from taxes, probate costs, legal issues, and unnecessary financial risk.