Kingdom Trust launches IRA supporting bitcoin ownership - OhNo "WTF" Crypto

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Kingdom Trust launches IRA supporting bitcoin ownership

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Kingdom Trust recently announced Choice, the first unified retirement account offering investors a single account for all their investments, including traditional, alternative, and digital assets such as bitcoin.

The announcement comes on the heels of the custodian acquiring a retirement-focused digital asset company, Choice Holdings, earlier this year. Choice Holdings was formed by CoinShares founders.

Coinshares is a digital asset manager founded in 2017. The firm has over 40 employees across three offices that manage over US$750M in assets on behalf of a global investor base.

Ryan Radloff, the current CEO of Kingdom Trust, a co-founder and CEO of Coinshares until January 2020, is one of the founders of Choice. Another founder of Choice is Adam Schifter, the current Chief Experience Officer of Kingdom Trust, and previously the Director of Marketing for Coinshares. Both Radloff and Schifter founded Choice in January 2020 and both founders joined Kingdom Trust in March 2020.

Kingdom Trust, founded in 2010 is an independent qualified custodian. The firm specializes in custody solutions for individual investors, investment sponsors, family offices, advisory firms, broker-dealers and various other investment platforms. After a decade of operation, the custodian now powers over 100K retirement accounts and provides custody for more than US$13B worth of assets.

According to Radloff, less than 1% of Kingdom Trust users are holding bitcoin and other assets in the same account; and less than 0.02% of total US retirement assets are exposed to bitcoin.

Radloff explains that Choice was built to fill a gap in the investment market, “there are estimated to be 7.1M bitcoin owners who have US retirement accounts with dollars in them, but not bitcoin.”

This is the first digital asset focused acquisition made by Kingdom Trust, which has been a US custodian offering qualified custody for bitcoin and other digital assets since early 2016.

Matt Jennings the Chairman of Kingdom Trust said, "In 2016, we lead the way into digital asset custody, and that opened up the floodgates for a whole new crop of custodians, I expect this to be just the same. A unified account with market access and direct exposure to bitcoin will be the standard, not the exception in five years and I expect it will be because we lead the way with Choice."

The Choice platform is a hybrid individual retirement account (IRA) that provides tax advantages to account holders. With traditional retirement accounts in the US like a 401(k), regular IRA, or a Roth IRA, investors are not able to buy and save cryptocurrencies. The only way users can access alternative investments like real estate or digital currencies such as bitcoin, they have to use a self-directed IRA.

The difference between a 401(k) and an IRA is that a 401(k) requires a sponsor such as an employer; and an IRA does not require a sponsor required, it can be fully contributed to by the user directly.

In the first quarter of 2020 Kingdom Trust quietly trialed a version of the direct crypto trading portion of the Choice platform with a select group of existing clients. According to the firm, the average crypto trade was at US$13K, with bitcoin being the highest volume asset.

Choice and Kingdom Trust have partnered with Kraken to power the crypto trades on the platform, and with Interactive Brokers to power the more traditional investment trades such as equities and ETFs. On Choice, crypto trades will cost 1% while stock trades will not have a fee.

Another large institution in the crypto industry that allows users to access bitcoin or other digital currencies via their IRAs or other brokerage and investor accounts is Grayscale Investments.

Grayscale was established in 2013 by the Digital Currency Group, which is one of the first and largest crypto-focused investment companies. Digital Currency Group also owns Genesis Trading, which has just launched a prime brokerage service.

In September 2013 Grayscale launched its premier product, the Grayscale Bitcoin Trust. This product enables investors to gain exposure to the price movement of bitcoin through a traditional investment vehicle, without the challenges of buying, storing, and safekeeping bitcoins.

Shares of Grayscale Bitcoin Trust are eligible to be held in certain IRA, Roth IRA, and other brokerage and investor accounts. The Bitcoin Trust has over US$3.3B in assets under management. Grayscale also offers similar vehicles for investors interested in investing in single digital assets such as Ethereum, Ripple and Litecoin and others.

Grayscale also has a Digital Large Cap Fund which allows investors to gain exposure to the price movement of a diversified mix of large-cap digital assets. The Fund seeks to hold large-cap digital assets that collectively comprise 70% of the entire digital asset market.



Nawaz Ahmed, Khareem Sudlow