February 22, 2026
10 mins
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January 27, 2026
January 27, 2026
A crypto advisor helps with digital asset investments, tax planning, and regulatory compliance. They explain which regulator oversees your activities and how to properly structure your holdings.
The distinction between securities and commodities matters. The SEC oversees crypto assets classified as securities, while the CFTC handles those considered commodities. The SEC's Crypto Task Force is working to clarify these boundaries and establish registration pathways for both asset types.
Good advisors understand the relationship between federal regulators like the SEC, CFTC, and IRS, plus state-level requirements under money transmission laws.
U.S. crypto regulation operates on multiple levels. Federal agencies include the SEC, CFTC, IRS, and FinCEN. Each state adds its own money transmission requirements.
The SEC's Division of Corporation Finance published guidance in April 2025 on disclosure requirements for crypto asset offerings. This replaced the previous approach of regulation through enforcement actions.
For tax compliance, the IRS now requires Form 1099-DA reporting from the 2025 tax year. Exchanges send transaction details, including cost basis and proceeds, directly to the IRS, which matches this against your Form 8949 filings.
Independent advisors navigate these requirements without conflicts of interest. They charge fees directly rather than earning commissions from exchanges or token issuers.
Verify advisors through the SEC's Investment Adviser Public Disclosure database. Request their CRD number and confirm registration status directly.
For state-registered advisers, check your state securities regulator's database. Registration requirements vary by assets under management and client types.
The SEC's Division of Investment Management issued guidance in September 2025 allowing registered investment advisers to use state trust companies as qualified custodians for crypto assets, expanding custody options.
Look for credentials like CPA (Certified Public Accountant), CFA (Chartered Financial Analyst), or CFP (Certified Financial Planner). These require ongoing education and ethical standards.
Check credentials through issuing organizations. FINRA's BrokerCheck verifies broker-dealer registrations. The SEC's IAPD shows investment adviser credentials.
Experience matters as much as qualifications. Ask how long they've worked with crypto clients and whether they've adapted to 2025 regulatory changes.
Independent advisors don't get paid by the platforms they recommend. Ask directly about any referral fees, commissions, or revenue-sharing arrangements.
Fee-only advisors charge hourly rates, fixed fees, or retainers paid by clients. This structure avoids conflicts of interest that arise when advisors earn platform commissions.
Watch for advisors who consistently recommend the same exchange regardless of your specific needs.
The IRS requires detailed reporting through Form 8949, which lists every crypto disposal, including sales, swaps, and purchases made with crypto. This feeds into Schedule D for your overall capital gains calculation.
Form 1099-DA creates a matching system. Exchanges report your transactions to the IRS, which compares this against your Form 8949. Discrepancies trigger automatic notices.
The IRS now requires account-based cost tracking, meaning you must track cost basis separately for each wallet and exchange. Advisors should understand reconciliation between your records and 1099-DA forms.
The SEC's Crypto Task Force aims to distinguish securities from non-securities and create appropriate disclosure frameworks. The CFTC launched its own initiatives in 2025 to enable digital asset trading under existing commodity regulations.
Ask advisors how they determine whether specific crypto assets fall under SEC or CFTC jurisdiction. Their answer reveals current regulatory knowledge.
State requirements vary significantly. New York's BitLicense creates specific operating requirements. Wyoming established a special-purpose depository institution framework for crypto custody.
Federal FinCEN registration applies to money services businesses handling crypto. State money transmission laws add another compliance layer.
Test knowledge by asking about custody requirements under both federal and state frameworks.
Ask for references from clients in similar situations. If you're navigating both federal and state requirements, speak with clients who faced comparable challenges.
Professional networks and crypto communities can provide independent perspectives on advisor competence and reputation.
Request written fee agreements specifying services, payment schedules, and additional costs. Hourly rates for crypto advisory typically range from $200 to $500, with specialists sometimes charging more.
Avoid percentage-based fees tied to portfolio value, which create incentives to recommend riskier strategies.
The Bank Secrecy Act applies to crypto service providers. Advisors working with exchanges or custody services should understand FinCEN reporting obligations.
Ask about identity verification procedures, source of funds documentation, and transaction monitoring systems.
Crypto volatility requires appropriate position sizing and diversification strategies. Advisors should explain how they approach allocation across different asset types and risk management for market swings.
The SEC's expanded custodian options in 2025 affect the custody strategy. Advisors should know how state trust companies work as qualified custodians.
No legitimate advisor guarantees returns in crypto markets. Promises of specific gains indicate either incompetence or dishonesty.
High-pressure tactics or artificial urgency are red flags. The 2025 regulatory environment provides clear frameworks, eliminating legitimate reasons for rushed decisions.
Ask how advisors have updated their practices following the 2025 regulatory changes. They should track SEC Crypto Task Force developments, understand Form 1099-DA reporting, and follow CFTC guidance.
Request examples of how they've helped clients transition from informal holdings to properly registered and reported portfolios.
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This article is for educational purposes only. It is a general guide for founders and users navigating the Web3 space. It does not constitute financial advice. Always do your own research before making any investment decisions.If you want to learn more about raising funds or which IDOs to look into, our team is here to help. Feel free to reach out to us on Telegram at any time.
