Crypto ETFs

[Poor Basler]

I used to have a small position in Crypto in Coinbase and, with the new funds available in the US, I thought I would move it to IBIT so it's in the same place as the rest of my portfolio, but I was surprised that Interactive Brokers doesn't allow Swiss customers to trade crypto products. I find this surprising as Swiss brokers seem to allow it. Thoughts about this? Where to best buy and forget some crypto? For reference, this is <0.5% of my portfolio, so not a crypto bro

 

[anshuk]

hmm.. did you get a message when you try to buy IBIT. I didn't attempt but I was able to search it and about to place a order..

 

[itzilev]

I used to have a small position in Crypto in Coinbase and, with the new funds available in the US, I thought I would move it to IBIT so it's in the same place as the rest of my portfolio, but I was surprised that Interactive Brokers doesn't allow Swiss customers to trade crypto products. I find this surprising as Swiss brokers seem to allow it. Thoughts about this? Where to best buy and forget some crypto? For reference, this is <0.5% of my portfolio, so not a crypto bro

Why don't you try a swiss broker? I think I saw a condition in IBKR saying crypto ETFS are available for those having more than 500k holdings.

 

[Poor Basler]

hmm.. did you get a message when you try to buy IBIT. I didn't attempt but I was able to search it and about to place a order..

I did try, in IBKR, I can open IBIT, but when I try to buy, there's a message that customers in my country are not allowed to buy Crypto positions. I tried non-US ones but same message, so it seems to be linked to Crypto products.

 

[Poor Basler]

Why don't you try a swiss broker? I think I saw a condition in IBKR saying crypto ETFS are available for those having more than 500k holdings.

I don't want to open an account in a Swiss broker just for a tiny crypto position. All my other holdings are in IBKR. I hope I don't have to wait until I have 500k

 

[Baptiste Wicht]

IB is restricting access to crypto to IB UK customers indeed. I know that several people have switched to a IB US account and they can then use crypto there, but I am not sure it's worth switching for a tiny position. If the position is tiny, maybe you can switch it off to something else like single stocks if it's your fun money.

 

[Max]

IB is restricting access to crypto to IB UK customers indeed. I know that several people have switched to a IB US account and they can then use crypto there, but I am not sure it's worth switching for a tiny position. If the position is tiny, maybe you can switch it off to something else like single stocks if it's your fun money.

Do you known how this switching works? It sounds a bit strange that such a formality makes such a big change.

 

[Baptiste Wicht]

It's not a formality because it's like changing brokers. Instead of dealing with UK regulations, you now deal with US regulations directly. For instance, at DEGIRO, they don't even let you transfer between entities; you have to open a second account and then transfer manually (and pay for it) the shares to the new account. At least, I think the transfer can be automated. You can open a support ticket to get more information by IB.

 

[Max]

It's not a formality because it's like changing brokers. Instead of dealing with UK regulations, you now deal with US regulations directly. For instance, at DEGIRO, they don't even let you transfer between entities; you have to open a second account and then transfer manually (and pay for it) the shares to the new account. At least, I think the transfer can be automated. You can open a support ticket to get more information by IB.

DEGIRO is what I thought about: one can't change the country there without changing the tax residency. I am surprised that IB allows that.

 

[tothda]

Hi!

If it's fun money and a very small portion of your portfolio, then why don't you try self-custody for your crypto? As an example you buy a Ledger hardware wallet (https://www.digitec.ch/en/s1/produc...up-function-bluetooth-crypto-wallets-10296605) and transfer your crypto from Coinbase directly to your wallet. You don't need a broker at all, and you can always count on those coins.

Of course this needs some investment of your time to do some research, how a hardware wallet works and how can you back it up (in case you would loose it). But in general it's not that hard.

 

[Poor Basler]

Hi!

If it's fun money and a very small portion of your portfolio, then why don't you try self-custody for your crypto? As an example you buy a Ledger hardware wallet (https://www.digitec.ch/en/s1/produc...up-function-bluetooth-crypto-wallets-10296605) and transfer your crypto from Coinbase directly to your wallet. You don't need a broker at all, and you can always count on those coins.

Of course this needs some investment of your time to do some research, how a hardware wallet works and how can you back it up (in case you would loose it). But in general it's not that hard.

Thanks for the hint but not worth it for my use case.

 

[Max]

It's not a formality because it's like changing brokers. Instead of dealing with UK regulations, you now deal with US regulations directly. For instance, at DEGIRO, they don't even let you transfer between entities; you have to open a second account and then transfer manually (and pay for it) the shares to the new account. At least, I think the transfer can be automated. You can open a support ticket to get more information by IB.

I have received an answer from IB: switching is not possible without changing the tax residency. The only option for trading crypto is to obtain the status of a Professional client.

We have different entities and entity is assigned based on your legal country of residence, each of which has been formed to carry client accounts based upon local regulatory requirements and IBKR policies. You will not be able to open a IB LLC account unless you relocate in future.

Cryptocurrency trading is currently not available to IBUK clients.

If you're looking at Cryptocurrency based products such as ETFs or Futures, kindly note that due to FCA regulations on IBUK client trading of crypto based instruments, MiFID Non-Professional clients are restricted from trading these products. As you're currently designated as a MIFID Retail Investor, you would not be able to trade on these products.

It is possible to be reclassified from Retail to Professional once certain qualitative, quantitative and procedural requirements are met.

Qualitative Requirements: We must conduct an assessment of your expertise, experience and knowledge to ensure that you are capable of making your own investment decisions and that you understand the risks involved.

Quantitative Requirements: We must ensure you have satisfied two of the following criteria:
1) You have carried out trades in significant size (EUR 200,000 or greater) on the relevant market at an average frequency of 10 per quarter over the previous 4 quarters;
2) Your entire portfolio including cash (and positions not held with IBKR) exceeds EUR 500,000;
3) You have worked in the financial sector for at least 1 year in a professional position.

Procedural Requirements: If you believe you meet the requirements to be reclassified as a Professional, you can submit a request to change your status in Client Portal by Clicking the User menu (head and shoulders icon in the top right corner) followed by Settings > Account Profile > "MiFID Client Category" and follow the steps on the screen.

You will find more information about MIFID in the following link:
https://ibkr.info/article/3298

 

[Baptiste Wicht]

Thanks for sharing their answer @Max

This is weird because I am sure some people from Switzerland mentioned they did switch to IB US... Maybe you can still try and hold two accounts, one IB US and one IB UK, if the transfer is not easy. You will see soon enough if you can create an account through IB US or not.

 

[Poor Basler]

This is weird, as I got a different answer from them:

Our system reflects that your account is under IB-UK entity. Please note trading in crypto ETF currency is available for legal residents of Switzerland only under IBLLC-US entity.

In order to trade cryptocurrency, and crypto ETF you will be required to start a new application from the IBKR web site (www.interactivebrokers.com) with an alternate email address and follow the steps:
- Select the red OPEN ACCOUNT button followed by the red START APPLICATION button to get started
- Create a Username, Password, enter your email and the Country/Region - Switzerland
- There will be a pop up box on the screen asking for the trading permissions in Crypto currency > Select to trade in Cryptocurrency for your account to open under IBLLC-US entity.
- Follow the remaining system prompts entering each required field before selecting SAVE & CONTINUE from the bottom-right corner of the Application.

Once your new account under IBLLC-US entity is opened, you may then request for Full Internal Account Transfer from IB-UK account to your new IBLLC-US account by sending a webticket request. Please note the Full Internal Transfer is a Manual process, and under normal circumstances, takes 3 to 4 weeks to complete, subject to review.

I am still unclear if I want to go down this path as I do not know if there is any downside to switching to IBKR US.

They also mentioned the professional trader option but I am far from meeting those requirements (boring buy and hold for the most part and not nearly as rich as they need).

 

[Baptiste Wicht]

Thanks for sharing @Poor Basler

Unfortunately, there have been many cases in the past where the support wasn't always consistent when asked complex questions. I would not be surprised if the answer to @Max was one of them.

 

[Max]

This is weird because I am sure some people from Switzerland mentioned they did switch to IB US... Maybe you can still try and hold two accounts, one IB US and one IB UK, if the transfer is not easy. You will see soon enough if you can create an account through IB US or not.

I have followed the instructions from @Poor Basler's comment to permanently end up here:

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[Baptiste Wicht]

I have followed the instructions from @Poor Basler's comment to permanently end up here:

You already have a UK account and it detected that? That's weird, these accounts should be separated.