DAG

Can RIAs Bill on Held-Away Crypto?

An RIA may be able to bill on held-away crypto in some circumstances, but only after reviewing advisory scope, client agreements, valuation method, fee calculation, disclosures, custody implications, billing authority, and supervision. Whether billing on held-away crypto is appropriate depends on the facts of the engagement, and the firm should confirm each element with qualified counsel before adding these assets.

What "Held-Away Crypto" Means

Held-away crypto refers to digital assets a client owns but that sit outside the accounts the adviser directly manages or custodies, for example, coins in a client's self-custody wallet, on an exchange, or at a third-party platform. Billing on these assets means charging an advisory fee against balances the firm neither holds nor controls, which raises distinct valuation, custody, and disclosure questions. For the broader regulatory picture, see the Crypto Services for RIAs Hub.

Why This Matters

Crypto values move quickly, assets may sit across multiple wallets and platforms, and valuation data can differ by source. If an adviser bills on assets it does not custody, it still has to explain what service it provides, how values are calculated, and whether fee billing creates custody or other compliance obligations. Related guidance on the underlying problem appears in Crypto Held Away From Advisor and Client Owns Crypto Outside Our Firm.

How It Works: Steps to Review Before Billing

An RIA should generally work through each of these before billing on held-away crypto:

  1. Confirm the assets are named in the advisory agreement and within the stated scope of services.
  2. Confirm advice is actually being provided on those assets, billing should follow service, not just balances.
  3. Determine how asset values are sourced (which pricing feed, at what time of day, and how illiquid or thinly traded tokens are handled).
  4. Determine whether the client, the custodian, or the firm calculates and deducts the fee.
  5. Assess whether fee-deduction authority over a held-away account triggers custody under the SEC custody rule.
  6. Confirm Form ADV and client disclosures accurately describe the service, the fee, and the valuation method.
  7. Keep records, pricing snapshots, fee calculations, and agreements, that support each invoice.
  8. Confirm a supervised, repeatable billing process with documented review.

A formal crypto investment policy statement and a crypto compliance checklist can help standardize these steps across clients.

Evidence Standard

This article does not provide legal or compliance advice. It identifies issues for review.

When It May Help

  • The advisor includes crypto in planning or investment advice within the agreed scope.
  • Assets are held away from the primary custodian but still receive documented advice.
  • The firm wants to bill consistently across the full client balance sheet.
  • The firm has a defensible, repeatable valuation process it can show on review.

When It May Not Be Enough

Some firms decide not to bill on held-away crypto because the valuation, custody, disclosure, or supervision questions are too involved to support reliably. Billing alone does not remove market risk, custody risk, or tax exposure on the underlying assets, and a firm's SEC registration does not by itself signal skill or guarantee a given approach is appropriate.

Related Questions

Does fee deduction create custody?

It can, depending on the facts. The SEC custody rule addresses circumstances where fee-deduction authority and access to client assets create custody considerations. Advisers should review the rule and the SEC's custody FAQs with counsel before relying on a deduction arrangement.

How should crypto be valued for billing?

Generally, the firm should document the valuation source, the time it is captured, which assets are eligible, and how illiquid or thinly traded tokens are treated. Because pricing can differ across venues, a consistent, written methodology matters more than any single feed.

Should all held-away crypto be billable?

Not necessarily. Billing should match the service actually provided and the firm's disclosures. Some held-away assets may be reported or monitored without being billed. See Can RIAs Advise on Self-Custodied Crypto? for related scope questions.

Bottom Line

RIAs should treat held-away crypto billing as a compliance design question, not a spreadsheet update, and confirm the approach with a qualified professional before going live.

Sources

Compliance Note

This article is for general educational purposes and is not legal, compliance, accounting, tax, or investment advice.

Disclosures

DAG Holdings Co is a holding company that does not provide investment advisory, brokerage, administrative, or insurance services to clients. DAG is not a law firm, does not provide legal or tax advice, and does not provide tax preparation services. Tax matters are handled through referrals to qualified independent tax professionals.

DAG Private Client services involve estate matters that require qualified independent counsel in the applicable jurisdiction. LLC formation, trust drafting, and estate planning services are provided in coordination with or by qualified independent legal counsel licensed in the applicable jurisdiction.

Asset protection structures, including Wyoming LLCs and trusts, do not guarantee protection against all claims, creditors, or losses. Outcomes depend on specific facts, jurisdiction, and applicable law.

Insurance products and services are offered through Xure Insurance or its affiliates.

Investment advisory services are offered exclusively through DAG Wealth, an SEC-Registered Investment Adviser (CRD No. 328627). Registration with the SEC does not imply a particular level of skill or training. Form ADV and Form CRS are available upon request or at www.adviserinfo.sec.gov.

Custody arrangements with third-party independent qualified custodians reduce certain risks but do not eliminate them.

Investing in digital assets involves risk, including the possible loss of principal. Digital assets are highly volatile and may not be suitable for all investors. Past performance is not indicative of future results.

Specific fee schedules, scope of engagement, conflicts of interest, and material business practices are disclosed in writing before engagement and in Form ADV Part 2A for the investment-advisory portion.

The information on this site is for general educational purposes and is not legal or tax advice.