Cryptocurrency (e.g., Bitcoin, Ethereum, Cardano, Solano, Litecoin, Polkadot, Hedera, etc.) is a form of virtual currency that can be exchanged for goods or services or used as an investment to generate income or value, as well as an encrypted and decentralized digital payment system. Cryptocurrency can also be used to acquire valuable digital artwork, collectibles, and sports memorabilia through the use of non-fungible tokens (NFTs)—unique digital tokens verifying true ownership of an underlying asset. NFTs, like other cryptocurrency investments, can significantly appreciate in value and must be secured and protected.
Rather than relying on banks to verify transactions, cryptocurrency uses blockchain technology (also known as distributed ledger technology) in which transaction requests are.jpeg)
broadcast to a secure peer-to-peer network, verified by algorithm, time-stamped, and added to a permanent ledger in a growing data chain.
One of the main benefits of cryptocurrency is that the blockchain decentralized processing and recording system that enables it results in transactions that can be even more secure than those made using traditional payment systems. However, cryptocurrency investment and ownership is not without risk. In addition to the cryptocurrency market’s volatility, improper storage, failure to prepare for potential tax liability, or forgetting to protect your digital investments in your estate plan can cost you.
Adept Legal Protection for Digital Assets
If you have cryptocurrency assets, you need knowledgeable and skilled technical experts and lawyers to help protect them. GuideOn is among the few law firms in the United States on the cutting edge of cryptocurrency security and protection. In addition to being a cryptocurrency owner and investor, lawyer Jack Grimes has deep expertise in the legal protection, taxation, and lifetime/legacy planning of cryptocurrency.
Setting GuideOn even further apart is our technical protection subject matter expert, Mr. John Sample. John was involved in the inception and coding of Bitcoin and has spent the last decade steeped in the tradecraft of cryptocurrency protections. John will guide you through the technical aspects of owning, securing, and protecting your crypto assets, greatly reducing the chance of hacking and/or loss of your valuable investments.
Through this unique combination of legal and technical expertise, every GuideOn client receives digital asset technical security, tax strategy planning, and legacy planning (incorporated into GuideOn’s wills, trusts, and financial powers of attorney). If protecting and enhancing your crypto investments for you and your family is your goal, GuideOn is the answer.
Lax Cryptocurrency Ownership Practices Can Put Digital Assets at Risk
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The typical process for purchasing cryptocurrency involves going to a crypto exchange and buying the virtual currency of your choice. Once purchased, investors often leave the cryptocurrency sitting in a wallet at the exchange while they continue to track the price. Unfortunately, this is extremely risky as it can expose your digital investments to threats such as hacking, digital theft, or even loss by virtue of an accident—such as encountering a bug in the software or failing to properly handle and secure your private crypto key.
GuideOn can assist you with the technical and legal aspects involved with owning cryptocurrency and other digital assets. Our on-staff cryptocurrency expert meets with clients in-person to transfer their cryptocurrency assets from an exchange or online digital wallet to cold storage for greater security and protection. You will also be provided with detailed training and instructions on how to maintain and protect your digital assets once they have been properly protected.
Protect your cryptocurrency and other digital assets with careful technical, tax, and legal planning.
Poor Tax Planning Can Cut Into Crypto Gains
In 2014, the IRS ruled that cryptocurrency is to be treated as property for tax purposes (and not as currency), which means returns are subject to the capital gains tax. More recent indicators suggest that the tax laws on crypto will continue to evolve, however. For example, crypto can be subject to income tax when employed in income-generating activities. And if there is any doubt about the IRS’s intentions in this area, consider their success in obtaining a court order against Coinbase last year to turn over transaction data for more than 13,000 Coinbase investors.
Let GuideOn be your expert guide in navigating this ever-evolving area of tax law. Depending on your particular goals, we can employ tax, trust, and estate planning to help protect your crypto assets to the maximum extent possible. And, of course, we will help you develop strategies to minimize income and estate tax liabilities.
Legal Protection and Estate Planning
If your family doesn’t know about your cryptocurrency or how to access it, those assets could be lost after your death. It is absolutely critical to choose the right Executor or Trustee in a crypto estate plan as it is easy for the holder of a crypto passcode and seed phrase to abscond with your hard-earned crypto investments. Any such theft or unauthorized transfer would be almost impossible to recover (this is an example where the privacy and decentralized benefits of crypto also create discreet risks which must be protected against).
In addition to the estate planning techniques already outlined, all of GuideOn’s estate planning documents contain digital asset provisions designed to protect and preserve your cryptocurrency for future generations. We also provide the executor or trustee with a road map that includes information about your digital wallets, their passwords, private crypto keys and PINs, and a step-by-step guide explaining how they can access the cryptocurrency and securely transfer it to beneficiaries. This instructional document can also come in handy should you lose or forget your digital wallet passwords.
Schedule a Consultation
Don’t leave the security of your digital investments to chance or be the guy who lost $265 million in Bitcoin because he couldn’t find his password (crypto key seed phrase). Let the skilled legal professionals at GuideOn help manage and protect your cryptocurrency and digital assets. Contact us today to schedule a consultation.