With the market crashing a Bitcoin IRA suddenly does not sound that crazy anymore


The SEC has never been a big fan of cryptocurrency and certainly not as part of a retirement account. It pointed at security reasons, and volatility as the main reasons why holding cryptocurrencies in an IRA was not advisable.

With physical wallets and cold storage the first point should not be an issue anymore (still something to be aware of though), and with regards to volatility the recent developments will probably also surprise the SEC.

For the last 20 days, Bitcoin has been significantly less volatile than the DOW (DJI), NASDAQ-100 (NDX) and S&P 500 (SPX).

And while Wall Street looks to close out the week with more than 43 percent of the S&P 500 in a bear market, with stocks down more than 20 percent from 52-week highs, Bitcoin saw a very stable month and is currently even in the green.

Is it time to go all in on crypto with your retirement? Well that would be quite risky. But there is no fundamental reason not to allocate a part of your 401K or IRA to cryptocurrency. There is a tremendous upside, on which you don't need to miss out on. One of the most well-known cryptocurrencies Ripple's XRP is currently used by a wide range of financial institutions.

Meanwhile it has been a month since several member of congress sent a letter to the SEC, asking for more clarity on their stance regarding cryptocurrencies.

1. The SEC should clarify the criteria used to determine when offers and sales of digital tokens should properly be considered "investment contracts" and therefore offerings of securities.

The public statements made by yourself, Commissioner Peirce, and Director Hinman are helpful indicia of the evolution of the SEC's views of digital token platforms. Please expand on what criteria the SEC is currently using - specific to digital tokens- to determine under what circumstances the offer and sale of a digital token should properly be considered an "investment contract," and therefore, and offer or sale of "securities" under the Securities Acts and the Howey Test.

The various criteria set out at the end of Director Hinman's speech are helpful; nevertheless, specific FAQ-type examples illustrating how these factors may be applied in practice could aid market participants in better understanding how these factors should be applied.

The marketplace for digital tokens is expanding. Other digital tokens in existence today should also be deemed to fall outside the parameters used to define an investment contract under the securities laws. In the current environment it is unclear which other unique characteristics of digital tokens are also considered by the SEC when making this determination.

2. Do you agree that a token originally sold in an investment contract can, nonetheless, be a non-security as Mr. Hinman stated? Can the resultant token be analyzed separately from the original purchase agreement, which may clearly be an investment contract? And, if so, could the resultant token, nonetheless be a non-security?

3. Please describe the tools available to the SEC to offer more concrete guidance to innovators on these topics.





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