Tax-Free Crypto Investing With a Roth IRA

Welcome everyone to the Directed IRA webinar. This is Matt Sorenson, CEO, founder of Directed IRA. So excited to be with you talking about how to use your tax-advantaged funds— Roth IRA, traditional IRA, HSA— to purchase crypto as an investment. I know if you're new to this, that might sound groundbreaking. Wait, my IRA can own crypto? Yes, it can. We're going to break that down today. We've been doing this, by the way, for quite a long time. We've been helping clients pioneering this opportunity. So if you're someone who believes in crypto as an asset class, I just want you to know your Roth IRA can own it and do this totally tax-free. Your other tax-advantaged funds, retirement accounts, that old 401(k) laying around that's invested in— you don't even know what it is. Well, if you believe in crypto, maybe you can invest some of those dollars that are tax-advantaged into the asset you know and believe in. All right, now I've got Aaron Halderman, the great and powerful. He's our CEO here, partner in Directed IRA, and he's going to go over some ground rules for today. And then we just want to give you some awesome education on how this strategy can work, the pieces and kind of the steps you need to take to execute on this. And we got some new announcements too.

But a couple groundbreaking announcements. So you'll want to stay on because about halfway through, we do have a special announcement on our institutional accounts. That you're gonna be able to use an IRA LLC or a solo 401(k). If you need to do a new one, that's fine. If you already have one, that's great. You're one step ahead on how you can use that in an easy process that we put together with the strategic relationships. We're gonna outline that. Also, we have a bunch of people live. There's several hundred of you. We're gonna do a rapid-fire Q&A at the very end. We'll take some questions throughout that I'll be moderating. Grabbing some good ones. Just stay on topic with the topic of the webinar being the crypto space today. If we don't get to them, that's totally fine. Just head over to our website, directedira.com. In the upper right-hand corner, you can hit, you know, schedule a call, book a call, and talk to one of our IRA account executives. You can spend 15 minutes with them, 30 minutes, whatever you need, totally free to help you get started setting up a new crypto IRA. I will be looking at the Q&A section, try and drop them over there versus the chat. I'll go back and forth. Because not everybody likes to follow rules or pay attention, but that's okay if that's you. But I'd prefer if you popped it over the Q&A. So we'll— it's going to be a good topic session today. So we're excited to roll and we even have some special slides for you. So here we go.

Yeah, we're, you know, we'll be able to download the slides. I don't know if we share them in the chat here, but we'll make them available to you. And of course, like Aaron said, this will be recorded so you can come back and enjoy this again. Or share it with your friends or family. All right. Well, let's dive into this. And first, right now, crypto is down. So there might be an opportunity to buy. I don't know. We're not here to give you financial advice about what to buy, when to buy. But we do know crypto has been an asset that's had significant run over the last 10 years. And we want to just let you know you can own this in a tax-advantaged account. We're going to break down how that works. Now, let's go to the slides here. I just want to show you the first thing here. We're gonna go back to 2017, Matt. Okay, I was wearing my best suit back then. Um, I still have that tie, by the way.

You even have a spread collar on.

Yeah, the spread collar. I still rock the spread collar every once in a while.

It's a classic look.

Pocket square. It's classic, you know. So, um, but that video right there is, um, I shot a video about how you can buy Bitcoin with your retirement account. Right now, this strategy I used, I used an IRA LLC. I'm going to go over how that works today. It's one strategy to use. It's actually not the easiest or most common anymore, but there's an application for it we're going to talk about later here. But back at that time, Bitcoin was $2,500 per BTC. It's been around $100,000, you know, plus or minus here. It's been going up and down, but let's say it's $100,000 BTC. So, I've had a pretty incredible return on that investment. And if you think about how can I keep all of the money, well, why don't we use the strategy and this account that's staring us in the face? We've all heard about it. It's a Roth IRA. Okay. You might use it for a stock or a mutual fund that maybe goes up 10%, but what about using that structure and that strategy for an asset that can have phenomenal returns? Okay. And this doesn't have to be Bitcoin. This could be XRP or Solana or whatever crypto it is that you might believe in. Invest in it. If you have conviction, it's going to have a high return. You should be using that Roth IRA account to do it. All right. So let's break this down. I just want to let you know, we've been doing this for a while. We're not just like coming to the block because this is the cool thing to do. We've been out there and found it to be a super valuable strategy for people who believe in this as an asset class. All right. Now keep in mind when you're buying or selling crypto, the government's going to tax you on that. All right. Now there's some tax rules that came out. This is way back from 2019, um, where the IRS updated, excuse me, some of their guidance on this. I wrote an article on Entrepreneur Magazine about this. I've been publishing Cryptopedia as well. But the first thing they said is you have short-term and long-term capital gains, just like when you're buying stock. So if I'm trading crypto, and I own it less than 12 months, I have short-term capital gains rates, right? That means it's taxed at whatever my regular income tax rate is. So if I'm at a 37%, the highest bracket, and I own crypto for 6 months and I sold it, well, you pay a 37% federal income tax plus your state tax. Now, obviously, if you own it for over a year, you get long-term capital gain rates. But the point here is, is if I made $100,000 gain on crypto, I didn't really make $100,000. Federal government's taken $20,000, the state might take $5,000. You really made $75,000. All right. So how can I keep all of that money, whether I'm trading and trying to build this over a long time, a portfolio I can retire on later, or whether I'm just buying and holding and sitting in this asset, but I got to sell it one day to actually live on this, right? And I got to exchange this crypto for USD or whatever it might be to actually have some money I can live on. So, um, so we want to get out of this taxation. And, um, if we look at here, I just got an example of how these different accounts work. If I buy crypto, let's say I bought $20,000 of Bitcoin and I sell it 6 months later for $30,000, so I made $10,000 gain, right? If I did that personally, just in my regular wallet, okay, this is just Matt Sorenson owns this, it's not in a traditional or Roth IRA yet. All right. I will. I made $10,000. I actually only got $6,500 of that. Okay. The IRS and the state came in there. Let's say I'm in a 30% tax bracket, federal and 5% state. Okay. So if I'm someone trying to compound and grow wealth over time, if you think about that, you know, that difference in gain there, right? In this example here, I had a $10,000 gain. That gain getting eaten into 35%, um, by taxes is atrocious when we look at compounding this over 10, 20, 30 years, which is how a lot of people think about building wealth, let alone just the $3,500 I got to send now. So if we go to the next step and talk about a traditional IRA, okay, now I've got that same $10,000 gain, um, but when I'm buying and selling crypto in a traditional account No taxes, right? So I've got this $10,000 gain for the 6-month hold period, reinvest the whole thing. Now I've got a $30,000 account working for me rather than the brokerage account over here, by the way, which would only be a $26,500 account, or I should say the personal wallet or exchange account. So it's going to take a hell of a lot longer for me to build that up and get gains and returns personally holding crypto, particularly if I'm trading. Than it is with a traditional IRA where I get every penny gets to be reinvested and grow and compound. Now, the last column here we have is the Roth IRA. Now, this is the crème de la crème. This is where you want to be because I get a $10,000 gain, no tax as that money is building up, no tax as I pull the money out. Remember, on a traditional account, and the downside of traditional accounts is when I start pulling that money out later, once I hit 59 and a half and I'm wanting to live off of this crypto, well, as I start selling that crypto and taking a distribution, well, I pay tax at ordinary income rates. This is whether you're selling a mutual fund or an index fund or real estate in your IRA, whatever it is in a traditional account, you pay taxes as you pull the money out. Now, there's no penalty, a 10% penalty that's before 59 and a half, but I still have to take it into my income. So traditional IRAs are tax-deferred. You're taxed later when you pull the money out in retirement. So if I think of like trading crypto now, personally, I'm taxed now as I'm making money. As I'm doing it in a traditional IRA, I'm taxed later. It's tax-deferred. I'm building up money. I'm not paying taxes as I go, but eventually I gotta pay the piper, the IRS, as I pull the money out at 59 and a half. And then the Roth IRA is the best deal out there That's the tax never. So if you're thinking about how should I buy crypto right now and what are my 3 options? Do I want to be taxed now? Do I want to be taxed later? Or do I want to be taxed never? I think you should choose the last one, taxed never. Why not? Okay. The government has given you options and they say, here's accounts. When you make money, here's how we tax you. You should be using the Roth IRA. Okay. It's the most popular account strategy we have for clients using a crypto Roth IRA. Okay. So the first point here is we can do this in a more strategic manner in building wealth in crypto, if that's what you believe in. Now, there's an article in Cryptopedia here we have. This is also on our website at directire.com. You go to the crypto page, you can kind of look at this. I basically analyzed the same strategy here and same issue and talked about buying $10,000 of Bitcoin in 2017, which is back when I bought crypto and showing you how much you get to keep versus the IRS. Bottom line here, and I'm harping on this of the Roth IRA because I want you to think Roth IRA when you're thinking of crypto, because it's totally tax-free. I get to keep all the money. All right. Now let's jump over to how do I do this? Because you might be thinking, well, Matt, I have an IRA at my bank or credit union or Merrill Lynch, and they say you can't own crypto in an IRA, or that I can maybe buy the Bitcoin ETF and that's it. What if I want to buy Solana or I want to buy XRP or actually want to own the Bitcoin? How do I do that? Well, it takes what's called a crypto IRA. So if you have your IRA account, let's say at Merrill Lynch, okay, and not to pick on them, but just as an example here, and let's, let's say that's a Roth IRA already. You would open up a Roth IRA, a crypto Roth IRA at Directed IRA. We would transfer that money, no tax. And maybe you've got $200 grand over at Merrill Lynch. You're like, well, I want to do $50K in crypto. Cool. Transfer over $50K. Leave the other $150 doing what you're doing over at Merrill Lynch. Transfer over $50, no tax, no penalty. That goes into your crypto Roth IRA at Directed IRA. And now what we've done is in partnership with Gemini, you have an exchange account and wallet with Gemini. Your crypto Roth IRA at Directed IRA will own that. You don't own it. If you own it, this is going in your 1040. Your crypto Roth IRA owns it, or you could be your crypto HSA, your traditional IRA. Just hang with me. I've given the Roth here as the example. Okay, now we put that $50K, which your Roth IRA owns, tax-qualified funds, not taxable, going to come out totally tax-free at 59.5% for you. And now you can go in there and trade those dollars in Gemini, whatever crypto is on the Gemini exchange, from Solana, XRP, Bitcoin, Ethereum, whatever your fancy is, you can buy and sell on there. No taxes as you're trading, short-term or long-term, doesn't matter. And no taxes as the money comes out later at retirement. So that is the first level of this, is I already have a Roth IRA and I want to get over to the crypto Roth IRA. Now let's hit another example. Let's say you're like, Matt, I've got a traditional IRA with E-Trade. Okay. And, um, but I want to do this crypto IRA. Now you've got two choices. You could say, I'll just do a crypto traditional IRA and I'll do the taxed later idea, this tax-deferred idea. I'm already doing a traditional IRA with stocks or mutual funds or what I'm doing. I got my tax deductions when I put money in that traditional account. I've liked it. And so, so your first option is just open up a traditional crypto IRA. At Directed IRA. We transfer over the funds, the whole amount or a portion, whatever you want. Again, no tax, no penalty. And then we go to the same process here. Your crypto, crypto traditional IRA will own a Gemini exchange account. You have a wallet there. You can go in and trade, okay, whenever you want, 365, 7 days a week, 24 hours a day, whenever you want, you can go trade. Now you might say, well, Matt, I want to go to Roth now. I was okay doing traditional with stocks and mutual funds, 'cause maybe I'm getting 5%, 10% return over there. But if I'm doing crypto and I really believe in this asset, it's going to go 10x, 100x over my career of investing in this thing, I want to go Roth now. Okay, well, you can do what's called a Roth conversion now. So what we'll do is, now you open up a crypto traditional and Roth account. We have it all in one at Directed. You transfer over the traditional dollars, We receive it in a traditional account and immediately convert it over to Roth. Now you've got Roth dollars and you're trading and doing crypto with Roth dollars. This could be an old employer 401(k) that's traditional dollars, an existing traditional IRA, doesn't matter. But we're going to, again, open up the crypto Roth and traditional account. We have to receive it as traditional 'cause it's traditional dollars and we do this Roth conversion. But that's been another popular strategy for a lot of crypto investors too, is they want to get to Roth and they want to do the tax-free type structure, but they're sitting over here in traditional dollars right now. And when they're buying stocks or mutual funds, they were fine with that. But as they think about peeling off a certain portion of this to go do crypto where they're hoping and believing the asset will do a significant return, they're converting over to Roth. Now, again, you can just stay as traditional and do that tax later, tax-deferred structure, pay the taxes later on the way out. Um, but you can also convert over to Roth. Now you can also do a health savings account. Okay. We have clients, my crypto's done. I've, my health savings account's done crypto. So your health, my Roth IRA does crypto. All right. My Roth 401(k) has bought crypto. So you can have a health savings account that, and this could be, you know, your health savings account at the bank or whatever health savings account provider you're using, Charles Schwab, I don't care. That health savings account dollars, those dollars could be transferred over to a health savings account, a crypto HSA at Directed IRA. And now you're using those crypto dollars. Now the account types are endless here. We have clients doing kids' Roth IRAs. All right, they have kids that work in their business or they have a summer job or they work on their rental property, whatever it might be. And they're paying their kids. So their kids have earned income 'cause you need earned income to do a Roth IRA., and then those Roth IRA dollars are in a kids Roth IRA at Directed, again, linked to a Gemini exchange account, and they're buying and trading crypto. And the parent typically do on, on their kid's behalf, um, as guardian, the person responsible on the account. So you've got the kids Roth account option. So basically what I'm getting at here is all of these tax advantage account opportunities that you hear about building wealth that you may already have. For stocks or mutual funds or other assets we have available at Directed IRA, and you can do it to buy and invest in crypto. So what we've done is we've partnered all these tax-advantaged account opportunities that we do at Directed IRA, we've linked them to Gemini exchange accounts through a special relationship with Gemini where your account owns that Gemini account. Very important because your social is not on there for tax reporting purposes, our EIN is for for directed as a reporting tax administrator, as a reporting retirement account administrator, which means this isn't hitting your 1040. Okay, so I want to take a break there for a second here. As we've outlined the first strategy here, which is our classic product, the most common, which is the crypto IRA. You have lots of account options. The most common way you go to fund this is transferring over existing retirement account dollars. We've gone over some strategies, health savings account, you can even move those over. Talked about the kids' Roth IRA, you can put money over. Another one I want to hit here, okay, and I'm just riffing here, I guess, if that's okay.

You warming up?

Yeah, I mean, I don't know, I'm just kind of rolling with it here, okay, is I want you to think about a backdoor Roth IRA. Because you might be sitting there thinking, well, Matt, I already got retirement account dollars, or maybe I'm self-directing, I'm doing real estate or private assets or other things that I believe in. And, um, but I want to do some crypto and maybe I could do a Roth IRA, but I've heard I'm high income. I make, you know, make over $150K a year single or $225K a year married. These numbers adjust every year, but I'm high income. I'm over those thresholds. I can't contribute to a Roth IRA. Well, you could do a backdoor Roth IRA. Okay, so if you're a high-income earner, you do what's called a backdoor Roth IRA, which we have for crypto as well and has been super popular for a lot of crypto investors. Where you put money into a traditional IRA, it's a non-deductible contribution, which is just something you note on your 1040. You convert it to Roth. You never took a deduction when you put that $7,000 in. $7,500, by the way, for 2026. So right now you can put in $7,000 for 2025, and in 45 days here, you can put in another $7,500 for 2026. So I can have $14,500 in this backdoor Roth IRA here in the next 45 days that I could use to go and buy crypto. So, but again, you put the money in a non-deductible traditional contribution, you convert it to Roth, no tax on the conversion because I didn't take a deduction. Now I magically got Roth dollars. So this is one of the most exploited loopholes in the tax code. Okay, you can do this. You can do a backdoor Roth IRA at Fidelity or any other provider. They'll make you buy stock or stuff like that. But here you can use that backdoor Roth IRA strategy for self-directing or here for a crypto IRA. Now, one other structural point I want to make is a crypto IRA is different than a self-directed IRA. Okay. We are a provider of retirement accounts that are like, we're open architecture. We're like, invest in what you want to invest in. We're not telling you what to invest in. I'm not giving you investment advice. We don't know. We want you to have conviction of what to invest in or working with whatever professionals you may be working with. So if you're like, well, I want to do real estate, well, that's a self-directed IRA. I want to invest in a private fund. That's a self-directed IRA. When you're like, I want to do crypto, we have a special crypto IRA. The reason being is we need to link it with an exchange and we don't want it mixed within all of your other assets. So that's why we have a separate crypto IRA product. That we partnered with Gemini, 'cause you need to on-ramp with an exchange. You want to have reliable custody. Gemini's publicly traded, one of the tightest on security and regulatory and audits you'll find out there in the entire industry. That's the reason we picked them as our special relationship partner. And a lot of the most popular cryptocurrencies we see clients that they want to invest in, XRP, Solana, Ethereum, Bitcoin, they have all those cryptocurrencies available on their platform that you can buy. And trade. So, um, so that is the crypto IRA product. Um, backdoor Roth IRA is an option. Transferring over existing funds. Don't forget about health savings account or crypto Roth IRA for your kids. Now you might be thinking, how much does this cost? Must be thousands, Matt. Um, this is— I feel like I want to do it today.

It's your lucky day. It's like an infomercial.

You must be thinking this costs millions. No, Well, our annual account fee is $295 on the Crypto IRA. It's a $50 account establishment fee. And then we have a half a percent trade fee. Now this trade fee is happening at the time you're trading on Gemini, and that's inclusive of our fee and the fee that Gemini is trading, all right? So, but that's it. That's your total account fees there. And you can pay the annual fee and the establishment fee with a credit card debit card when you establish the account. Then the trade fee, of course, is happening at the time of trade and is just coming out there as you're actually trading.

So buying and selling on Gemini's exchange at that time that you're buying and selling is that half a point, 50 basis points. So Gemini's collecting that right at the time of trade.

Yeah, a lot of times you won't even see it if you're not paying too close of attention, but it is being collected there. Just heads up. And if you're just buying and holding, then there's, you know, you just have the $2.95 annual fee. Otherwise, you're going to have the trade fee depending on how many trades you're doing at a time. So it's 50 basis points, which that comes out to 0.5% on the trades.

So just to reiterate, Robert, great question. A few other people have asked too, like, what if I already have an account at Directed IRA, it's invested in real estate or promissory notes or maybe even precious metals, do I need to have another account or can I use that account? The answer is that you need another crypto IRA account. Again, it could be a traditional, Roth, an HSA, an ESA, an inherited account, any, any type that we offer already that's a self-directed can also be a specific crypto IRA account that will have access to the Gemini exchange to trade and sell cryptos.

Like, that's what I do. Like, so I have my crypto Roth IRA. I have a separate Roth IRA that's invested in private companies and other private assets, notes and things like that. And so those are two different account types, and it's because of crypto And frankly, all the regulatory stuff, stuff for risk management purposes. And as we created these products, we needed them separate from your other assets and easily to be able to integrate with Gemini in terms of how we're tracking that and reporting that. So that's— there's some real rationale behind it there of why it needed to be a separate account. But now, for those of you that have an IRA LLC, though, let's say you have your self-directed IRA owns an LLC that owns real estate or other private assets. We're going to come to an option here in a minute here we're going to go over how you can establish an institutional account with Gemini through us for your LLC.

So for all of you that keep typing in on who holds the keys, how that works, can I move into a cold storage or a physical hard wallet? We're about to get there. So just hang tight.

Yeah. Yeah. So, you know, and I do both of these. I do all the stuff we're talking about here. I do all this stuff when I talk about you can invest in a private company, you can buy real estate, you can do private lending, you can buy crypto. I've done all this stuff with my account, um, and I have these different account types. I got the crypto Roth IRA, I have a self-directed Roth IRA, I have a checkbook LLC with another account, I've got a self-directed health savings account. And so you might have multiple accounts in different buckets of stuff that you're doing. Now, as to the crypto Roth IRA or crypto IRA in general, it doesn't matter the account type with Gemini, you are with Gemini, okay? So, and you will be on exchange with Gemini. Now, they don't leave everybody's crypto on exchange. They only have a certain amount available that for trading. Um, and, and Gemini, whether you like them or not, I'm just saying they've been a great relationship partner with, with us. Um, they are audited by Deloitte. Go read up on their trust and security stuff that they have that can give you comfort with that. Um, and so if you feel comfortable with that, then that's the crypto IRA. Okay, now if you're like, nah, my keys, my crypto, I'm not letting that stay on anybody's exchange, I don't care who it is, I want to hold the keys, or I want to be off exchange. Well, we have an option now we're going to go over for you. All right, any questions on the crypto IRA before I get to the next?

Yeah, let me, let me hit just a couple before we, um, get to today's exciting announcement. Um, what's the process of if I already have an IRA somewhere else and I now want to do a crypto IRA? So I have a, you know, a Roth IRA at Fidelity or Vanguard or even Robinhood, and now I want to do a crypto IRA. How does that work?

All right. It's a 3-step process. So step 1 is you'll open the crypto IRA, choose the account type. That could be Roth IRA, traditional IRA. Depends on what you already have if you're moving over. So let's say it's a Roth IRA at Robinhood. Okay, so you open a crypto Roth IRA, a directed IRA. You can do fully online. You don't even talk to anybody here. We want to talk to you if you want to and need help, but you can do it fully online yourself. You don't even need to talk to anybody. Okay. So that's step 1, open the account. You can do that in 5 to 10 minutes. Okay, simple. Step 2, you need to fund the account. Well, if the money's over at Robinhood, we're going to submit a transfer request to Robinhood to say, hey, they want to send the whole account over here or a partial amount. Maybe you've got $100K at Robinhood and you're like, I want to send $50K over to my crypto IRA at Directed IRA. Now this is a transfer request form that we will submit for you. You'll need your authorization, of course, and information on, hey, this is my account at Robinhood. It's account 12345. Send us a copy of your statement. That's the easiest. We're going to go request those funds. No tax, no penalty. Okay. That's step 2. Now we've got that money in your account. This is going to come in USD. So if you've got the money invested at Robinhood, you want to get that down to cash, whatever it's, $50 or $100, however that amount is in your scenario that you want transferred over in cash. So we receive that in cash. DirectED. Step 3 is you're going to go invest the funds. Now, we don't make investment decisions. You decide what you want to invest in. That money, once it hits your account at DirectED, we put it as USD into your Gemini exchange trading account, and you're the authorized trader on the account to make whatever trading decisions you want. So you'll be the one logging in there to go decide what crypto to buy, when, whatever parameters you want to put on it. We even have clients using trading algos like Arch Public. We did in our last webinar. It's up to you. You can go monitor it. You can buy and hold. You can trade all the time. You can use an algo like Archipog. That's the only one that's approved on our stuff. So, so that's how the— that's the 1-2-3. Open, fund, invest. Now the fund could be a new contribution too. You gave the scenario of someone wanting to come from, say, Robinhood. But if you're like, well, Matt, I'm just— maybe I want to do a new health savings account and I got a family HSA I could do. I got a high deductible plan. My kids are on, my wife, my spouse, or whatever. I'm going to do an HSA. Just do a new account. You can put over $8,000 into an HSA every year and you could do a crypto HSA, or that could be your $7,000 Roth IRA contribution for 2025 and again $7,500 in 2026. So lots of options on just how to get it funded, but it all remains the same. Open, get it funded, new contribution, transfer, rollover, and then you're the one making the investment decisions and that'll be through Gemini. On which you can do on the mobile app or you can do on their desktop interface. And just a little tip for those of you— they used to charge more on the mobile app. Um, we have that negotiated down though, so it is the same half a percent trade fee whether you're trading on mobile app or you're trading on desktop.

Yes, the— a few other questions. Our crypto IRA product is with Gemini specifically, so it's Gemini's exchange. We're going to get to the institutional stuff here in one second, but Let me just ask a clarifying question, because there's a lot of the same question keeps coming in and we need some clarity on it, which I think will benefit everyone. So I have a Roth IRA at Vanguard. Again, it's not in crypto. It's obviously, it's just in the markets. And I want it, do I need to open a crypto Roth or do I have to start by opening just a self-directed Roth at Directed IRA?

Yeah, you'll just— if you have— they have a Roth IRA at Vanguard. Yes. Okay. You're just going straight to a crypto Roth IRA at Directed IRA. The self-directed IRAs at Directed IRA are for private funds, real estate, an LLC. Okay. The crypto IRA is for crypto. And if you're like, I'm buying crypto, do the crypto IRA. Okay. So it may sound confusing because we have two different approaches because it's crypto for crypto and self-directed for everything else. But that's how it works, structured that way. So you just go straight to the crypto IRA. Now, if you're like, well, I want to do real estate too, I want to invest in a private company or a startup or do some private lending, that's a separate self-directed IRA. You would actually have two accounts, which is what I have. I have a crypto Roth IRA. I do the Gemini thing. I'm trading through Gemini. Okay. I also have a crypto Roth IRA. It owns private companies. It's done private lending. As an LLC. Okay, you can have that strategy too. That'll be two separate accounts if you want to do both those things.

And same would apply if you're doing a crypto HSA, if you're wanting to open up a kid's crypto Roth, those are all separate accounts, all have the same type of fee schedule that we just outlined. And you're on Gemini's exchange as a trader to buy and sell at your leisure. Okay, I think that's good.

Okay, cool. Let's get to the next option here. So, um, people have asked, you know, Matt, I wanted— I don't want to be on Gemini forever, I want to go off exchange, or I want to hold the crypto on a hardware wallet, you know, um, how do I do that? Well, you're going to use the old-fashioned structure. So at the beginning here, I showed you guys the picture of me back in 2017 and how I bought crypto back then was using an IRA LLC. And we've been doing this with lots of clients over the years. Um, but we kind of perfected this and made it simple. So some of you might already have an IRA LLC. Actually, you might be a self-directed IRA investor doing real estate or other private assets, and you have an LLC with a checking account and you're like, well, I want to open up a Gemini exchange account. Can I just buy crypto right out of my LLC? Can I just link my bank account with my LLC? Yes, you can. Now let me explain the IRA LLC here, because some of you may not even know what the hell this is. So the first thing is, is when you have a self-directed IRA, a directed IRA, we're not talking about a crypto IRA. Okay, hang with me here. I know this might be confusing. Okay. Say you just had a self-directed IRA, directed IRA, which those self-directed IRAs are you know, buy real estate, private notes, invest in an LLC, a private fund. Here what you'll do is you say, rather than my IRA own real estate directly or do private lending out of the IRA to some borrower, I want my self-directed IRA to own an LLC 100%, and I will be the manager of the LLC. So this would be Matt Sorenson's IRA owns this LLC 100%. It's called an IRA LLC. Now you call the LLC whatever you want, XYZ Investments LLC. Now I'll designate the amount I want invested from the IRA into the LLC. Let's say it's $100K. That $100K is going to go into the LLC's business checking account. Now we work with Titan Bank primarily. They do these IRA LLC business checking accounts. They streamline them. They know what they are. They aren't going to ask you 1,000 questions about how does your IRA own an LLC and make you complete all these documents and send you to the wrong people. Okay, we've got a streamlined process to get the IRA LLC set up. Our law firm sets up the LLCs. So your IRA owns the LLC 100%. LLC has a checking account. You are manager of the LLC. Now you don't own the LLC personally. You're just manager of the LLC. Manager of an LLC is like president of the corporation. That means you have decision-making authority on behalf of the LLC. So one thing I can do is I can enter into contracts, I can sign checks, I can send wires from the LLC bank account. And so for a lot of our real estate clients, they use this IRA LLC. I've used it when I bought rental real estate with my retirement account. I've used the IRA LLC structure. I'm the manager of the LLC. My account owns the LLC 100%. It put the money into the LLC business checking account, and that LLC business checking account I've got to use for the investments. I'm not using it personally or taking a salary. I'm out investing it and growing that, okay? And it's building up in the LLC. So when I showed you that video in 2017, I had an IRA LLC, I was buying rental properties and I had cash flow coming in on them. And I, my clients at the time asking me, can I buy Bitcoin, Matt, in my, with my IRA LLC or with my self-directed IRA? And I was like, this is even before directed IRA existed, by the way. I was like, huh? I don't know, let me try. So that's what I did. I used my IRA LLC, I linked it to an institutional exchange account, and I started trading it. Now, back in 2017, that was a little easier. Nowadays, if you try to get an institutional account for an LLC, when you go to like anybody, this could be Gemini, Coinbase, Kraken, I don't care who it is, They treat you like you're a hedge fund with a billion dollars. Who's your board of directors? Who are your officers? What type of insurance do you carry? Do you have any investors or funds that are, you know, sovereign nations? Do you— like, it's like, oh my gosh, you're filling out this application, you're like, surely this is the wrong application. I have $100 grand or $50 grand or $25 grand in an LLC that I just want to buy crypto with and link to an exchange to get on Raptir. So what we've done is we have worked with Gemini to be able to establish institutional accounts for your IRA LLC. So now what we're going to do is if you're like, Matt, I have this IRA LLC structure, link me to a Gemini exchange account. We will have your LLC as the owner of this Gemini exchange account. You can then link the Gemini account to your LLC business checking account. Because you got to get money over there, but you're in control of the LLC business checking account. This is different from our crypto IRA because you're the manager of the LLC. So you will link your checking account, whatever bank you're using, to Gemini, and you'll send over the amount of money that will go to Gemini. Now that's in your Gemini exchange account funded from your IRA LLC business checking account. Now you're at Gemini. There's an exchange account open in XYZ Investments LLC or whatever your IRA LLC is called. In the end owned by your IRA, so not taxable. We help you fill out your W-9 correctly when you establish this. Now that LLC can go and you're going to buy crypto on the exchange at Gemini. Now, because this is different from our crypto IRA and you're doing it through an LLC structure, if you want to go off exchange, you can. All right. So now if I'm using this IRA LLC structure, which is a little more complicated and expensive to set up, but For those of you that are like, "Matt, I just want to set this up from the beginning. I want to go off exchange, I want to do crypto, but I was not going to do your crypto IRA because I had to stay on exchange." Okay, you could use this option for the sole purpose of using your retirement account to go off exchange. Okay, so now it's the same process. I got to open the self— let's say you're starting from scratch, okay? You've got to open a self-directed account. Let's— this is a self-directed IRA if you're going this route, by the way. You're not doing a crypto IRA if you're going this route. Open a self-directed IRA, step 1. Step 2, you need to still fund the account. Transfer, rollover from Vanguard or Schwab, whatever it is, okay? That gets funded in the account. Step 3, you need to invest it. Now here, the investment is going into an IRA LLC. We have an intake that you'll complete for an IRA LLC that says, you know, what's the name of the LLC? How much money are you investing from the IRA into the LLC? And what state do you want the LLC set up in? And then our law firm, KQS Lawyers, that's my law firm. I'm a lawyer too, but they're going to set up that LLC for you. It's $1,200 for the IRA LLC. Now that money comes in from Schwab or Vanguard. It's in your self-directed IRA. We're going to invest it into the LLC, which will go in the LLC business checking account. Again, we typically use Titan Bank. And your LLC owns that. You're manager, you have signing authority on that LLC business checking account. Okay, now there's an additional step. I said there's 3, there's really 4 here, okay?

A bonus, a bonus 4.

Because now we've got the money in the LLC business checking account, but you still need to link to Gemini. And this has been a pain point 'cause we have lots of clients over the years that are like, "Matt, I just want to get an institutional account for the LLC." Coinbase treats me like I'm a billionaire and like I've got some CFO and a whole accounting department and audits that I can send them to get this damn thing set up. And they're like, yeah, sorry about that. And Gemini is giving me the same runaround, and Kraken and everybody else out there. Well, we know, we've heard that, and some clients have gone through it and been able to figure it out and pulled the right levers or had the patience and took the 6 months to get it done. I'm just telling you now, we have now a relationship with Gemini because we've built a good business with them and a good relationship where we can establish these exchange accounts in the name of the LLC. And this is the new step 4 here. So now you're going to link that Gemini exchange account, which we will set up for you. You have to make the request to us. You will fund it from your LLC checking account into the exchange account at Gemini., and then you go buy whatever crypto you want. Now you will have authority besides just as a trader to trade on that Gemini exchange account in this structure to where you can take that crypto off exchange. All right, you can hold it on a Trezor or hardware wallet, whatever it may be. All right, now we want to be careful. You better bring that same crypto back or have a record of whatever trades you might have done off exchange of how that's transpired, because I'm not going to let you take off 1 BTC and come back with $100,000 in your Roth IRA, right? That'd be a problem. I'd be like, how'd you do that? Okay, so, so just know there's some, there are some checks and balances there, but this is a new strategy, allows you to go off exchange. Now, some people might say, well, Matt, has the IRS approved this? No. Has the IRS disapproved this? Nope. Okay, so if you're doing this structure and going off exchange, This is kind of a pioneering strategy. We're not aware of a rule that restricts this or that'd be prohibitive, but there's nothing greenlighting this either. So if you're like a cautious person on this crypto strategy and self-directing crypto in general, don't do this. Okay. This is not meant to be any legal advice or an opinion here. I am a lawyer, but I'm not giving this as legal advice here. I'm just saying like, There's not clear guidance saying green light this, you're totally fine, don't worry about it. But there's also nothing to the contrary saying that you can't. So we've allowed clients to use this strategy if they want. Law firm KQS Lawyers does set up the IRA LLC. Now that was a mouthful and I hope that made sense 'cause this is an advanced strategy. If I lost you on this explanation, this probably isn't for you. Yeah. You might, this probably isn't for you. Okay. This is for the crypto enthusiast or the expert person. Maybe just start with the crypto IRA first. Or if you're like, Matt, I'll just rewatch this. Or basically when you set up the IRLC, by the way, you get a consult with one of the lawyers. You talk through it. There's a lot of questions. It's not rocket science, but it is some steps. Okay. And this is just the way this is with retirement accounts and some of the rules. We have to get through these steps in order to enable this strategy for you. But the punchline is you can buy crypto with a tax-advantaged account, including a Roth IRA, and go off exchange.

Say that one more time.

Yeah, you can go off exchange and you can hold your crypto. You can hold the keys.

But what if I lose my keys?

That's your problem. Exactly. And, and we will distribute that from your IRA. So that's another problem. And just telling you, there's a lot of compliance issues with this, right? If we, if everybody came to us and said, well, we just lost our keys. I don't know, Matt, what am I supposed to do? Sounds like you probably use that crypto for something else and you just didn't want to distribute it yet. Cause maybe you're not 59 and a half in your Roth IRA and you knew you'd have an early withdrawal penalty. So just know there's going to be some oversight on this on our end. We don't want any, like anybody thinking this is a strategy where they can go out and do some, I don't want to say funny business. That's the weird, the wrong word, but.

Anything improper.

I was also going to say inappropriate. That sounded like your junior high teacher.

I don't know. So let me hit a few things real quick. So there is no threshold for these institutional accounts. One thing that we didn't hit on, but we are set up to do it, is this would apply for solo K accounts as well. Yes. So if you have a solo 401(k), with us or if you're wanting— with the trustee checking account.

Yes.

And you're wanting to— let's say it's somewhere else, you would have to restate and can move to us and we can help facilitate all that for a fee, of course. But we can do that. But if you have an existing Solo 401(k) already with us, you'd need, you know, a trustee checking account set up and we can help facilitate this process. Again, no, no minimums, no high investment thresholds. Steve, great example here. He's like, I have an IRA LLC that I did with you guys and it's literally taking me over 6 months and I'm still not approved. And that's why we, you know, wanted to bring this to our clients to give you a product and solution that we could help facilitate. And it's taken us quite a while to get to this point. And, you know, hopefully it'll be a smooth process. For each of you. We've already tested it. It's worked, working, and we're excited to take this to each of you. Should we hit on the fees and how we have that structured? Yeah, I know all of you are dying to hear, you know, how we make our money or how does Gemini make it or what are we doing? We've streamlined it, made it very simple.

Yeah. And let me kind of go over what's going to be required in the process too, and that what we'll do. So what you'll do is you're going to get— you're going to create a password with Gemini. So we will establish the institutional account. On your end, you're going to need to create a password and follow Gemini's instructions there. And then, which is pretty simple, you know, we've all created users and passwords before. And then step 2 on your end is you will need to link your LLC checking account, which is just the bank routing and account number, to Gemini. All right. And then that's going to link it so you can authorize a certain amount to go from that LLC checking account into USD, with Gemini. Now, what we're going to do at Directed is we are going to pre-fill the institutional account application. All right, we've already done a couple of these. This is again a new product launch. So, so if you're— everybody's rushing in on this, just hang tight. We'll get to you. We'll get this set up. It will not be 6 months. Okay. This should be something that can be done within a week. We're hoping to get that process down even faster than that. But right now, Plan on about a week's processing time to get this done. So again, we will pre-fill the institution account application. We know the things that Gemini's looking for. You're going to need to review and approve that. We are going to complete the required W-9. We're going to need some of your LLC documentation to do this. Obviously, we'll typically have this on our files if that IRA LLC was processed through us, and it only works if it was, by the way. If you're using some other IRA custodian for your IRA LLC, You need to transfer your account over here ASAP, and then we'll help you on this. Um, and then, so we'll have your LLC documentation. We'll be providing that with Gemini. These are some of their requirements. And then we need a copy of a photo ID. Now, a lot of things when you get into this process, typically working with crypto providers or custodians or other regulated institutions, you need to give them exactly what they ask for. If they ask for a photo ID, Don't scan an ID and send it to them. They do not accept scanned IDs. It must be a photo, literally photograph. You can do it off your phone. It must be an actual photo ID. So, but we will be collecting those if we don't have those items. Otherwise, we— a lot of times we already have those and we'll be running forward once you make the request to go establish this. Now, in order to initiate it, we have a request form. Okay, that you will request that says, hey, I want to go do this. It authorizes these fees we're going to talk about here in a second, goes over what we're going to do and what you're going to do. You agree to some terms and conditions, and then it's also the instruction, hey guys, go start getting this going for me. All right, now we can get to fees. The wind-ups have been long today, guys. Sorry about that. Hopefully it's helpful though and instructional. All right. There's a couple of things to know. One is we have an onboarding fee of $100 when you're doing this. Our team's going to have to do this. We got to prepare all this stuff for you. So it's a one-time onboarding fee of $100. The second thing is there's an annual fee for this of $100 that'll be on your account. Okay. As you hold an institutional account with Gemini, there's an annual fee that we'll be charging to your credit card on file over here of $100. Also, the trade fee is 0.5%, just like our crypto IRA fee. This is 0.5% or 50 basis points. And the trade fee is being taken out as you're trading on the Gemini platform. And that's inclusive of Gemini's fee and our fee as well. So, so that's the fee on the institutional account setup for an IRA LLC or a trustee checking account in a solo 401(k). Again, this allows you to get USD from your IRA LLC or solo K trustee checking account into Gemini. You'll have a Gemini exchange account. You can buy and sell any of the crypto that's on the exchange there, and you can go off exchange too to a hardware wallet. And that's the, uh, the new fun option that we have available for you. So, um, our team can help with questions on this. Um, there might be some firing off in the chat here, and I'd love to answer any questions we can here as well. We're excited about this new option that we have for everybody. Um, if you're brand new to investing in crypto though, and just guys, I do the crypto IRA, just saying. So, um, I know some, some of you, Mikey's My Crypto, you're like, Matt, you're crazy. Um, I also do frankly have this structure because I did it back in the day in 2017. I did this structure. Um, but now we finally got around to doing it and making it an option for all of our clients. But what I would say, 9 out of 10 people are just going to do the crypto IRA. Because $295, it's much easier to get set up, your annual cost. This last strategy here, you're going to have the IRA LLC cost to set up if you don't have one already. So that's $1,200, what we charge in my law firm, includes a tax consult with an attorney. And that may be something you need anyways, frankly, but I'm just saying it is a little more extra steps here, right? 'Cause now you're doing a little more work. You got to link the checking account. Um, but there is greater flexibility here and has other options in terms of going off exchange if that's something you want to do as you're storing and holding your crypto. All right, what questions we got we can hit in the chat?

So, uh, I guess let's just recap real quick the actual trading fees for this institutional account. Just quite simply, it's 50 basis points, half a point. So buying and selling, same as our crypto IRA product. So just this institutional account, like the— it's the same trade fees. The only thing that we have different is the onboarding fee and the setting up of each, uh, member authorized user on there. And then we have a $100 annual fee to add this on to your IRA LLC or solo K. That's where— that's— those are fees. Yeah. So that's not a trade fee. That's an administrative fee to add that onto your LLC or solo K is the $100 a year and then it's 50 basis points or half a point every time you buy sell. That's it. And Gemini is collecting that, charging that.

Yep. That's it. Yep. All right. Awesome. Well, we got the— let me just show this on the slide here so we can see some of that little promo code and the fee breakdown. We also have a little promo code. You can use Webinar100 to open up a new account. Account here. That would be for new accounts set up, crypto IRAs, or even a self-directed IRA if you're doing an IRA LLC. That's not for other fees to offset, that's just for the crypto IRA or self-directed IRA that you set up if you're doing the IRA LLC. We have other resources over at that website, that URL, directedira.com/cryptocurrency. There's a chapter in my book on, on crypto and self-directed IRAs. We do have other webinars and other resources on this topic if you want to dive further into this. And then we have an incredible team here too to help. They can help on the new accounts team, going over any questions you might have, getting the account established. Oh, I've got this old 401(k) here, this old 403(b), or my spouse has this old IRA at a credit union or at TD Ameritrade. And like, whatever it is, I mean, we can help you through getting that account open, getting it funded, and then getting it invested, whether you're just doing the crypto IRA and you're just gonna be trading right at Gemini, or you're doing this IRA LLC strategy we've talked about where you can go off exchange, um, as you're holding your crypto. So lots of options there. I want to thank everybody for being on today. Of course, this will be recorded. Again, if you registered for this, you'll get a notice on it. Otherwise, just get signed up for our newsletter. Get on the newsletter at directedire.com if you're not getting that, because you get updates on other awesome webinars we're having, other educational resources, events, articles, videos we're putting out, and the recordings. Of the awesome webinars that you may have missed. So thank you everybody for being on. Aaron, anything you need to say on the way out?

I mean, yeah, just go over to directedira.com. Go schedule a new account call with one of our amazing IRA account executives. You can just pick the one with the picture that you relate to the most. Picture or name, they're all up there. So pick one, book a free call. They'll help you get started with a new account. Or if you already have an existing IRA LLC or Solo K and you want to get set up with a Gemini Institutional account, they will help facilitate that as well, get you the paperwork involved for that, can go over the fee schedule again if you need more clarity on that and any other clarifying questions that you need. And so again, just there's two different products that we've, you know, created and are made available. To our clients. You can have just a crypto IRA, which is just, it sits on the Gemini exchange. You have a trading account with them. You can buy and sell at any time, but you're staying on exchange. You can use any account type. You do not need an LLC. You do not need a solo K. You can use any account type we have, even a kids Roth crypto account. The new type of product we discussed today, you can have an IRA LLC or existing solo K or create a new one if you don't have one already, but it's totally up to you. You don't have to do that structure, but if that's what you want to do and you want to go on to Gemini's exchange and then move off so you can hold the private keys, you absolutely can do that. So we have that process and product dialed in. We've done it in a way so it could be moved much faster and more streamlined than you just, you know, going through another exchange or even with Gemini, some of you still haven't, been successful to do it, but we're able to fast-track that. We have, you know, that process dialed in.

Yeah. And one other question that we had too was, what if I have a multi-member IRA LLC? So on the onboarding, that's an— so let's say you have your IRA and your spouse's IRA that each own, you know, 50% of an IRA LLC. So there's two IRAs that own the LLC. Well, that's more work for us. It's additional $50 per member for the setup. So that would be $150 total. Okay. $100 for the first, $50 for the second. And then there's an annual fee per account.

Okay.

I need to understand that is like these are much more complicated. So the annual fee is a little bit different in setting up the multi-member LLC. Most of the LLCs are single members. So most of you out there, you don't need to stress about this, but there is some difference on the pricing here if you have multiple members in an LLC. All right, well, thank you everybody for being on today. We appreciate you. We appreciate your business. Um, for any of you that may not be customers yet, we look forward to earning your business. And, um, thanks to everybody for being on. We'll see you next time. Until then, stay calm, self-keep calm.