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What is Cryptocurrency?
Cryptocurrency is a form of digital payment that operates independently of banks for transaction validation. Instead, it relies on a peer-to-peer network, allowing users worldwide to send and receive payments directly. Unlike physical cash you can hold and exchange in person, cryptocurrency transactions exist solely as digital records within an online system that logs specific exchanges. When you transfer cryptocurrency, each transaction is documented on a public ledger. These digital assets are stored in electronic wallets.
The term “cryptocurrency” comes from using cryptography to secure transactions. This involves sophisticated coding techniques that protect and transfer data between wallets and public ledgers. The goal of this encryption is to ensure security and integrity.
The first cryptocurrency, Bitcoin, was launched in 2009 and remains the most widely recognized today.
Are Crypto Transactions Legal in the U.S.?
Cryptocurrency transactions are generally legal in the United States. U.S. laws allow individuals and businesses to buy, sell, trade, and use cryptocurrencies as a means of exchange, provided they comply with certain regulations.
The IRS classifies digital assets as property. Categorizing digital assets in this way means that every sale, trade, or purchase using cryptocurrency is potentially taxable, and capital gains tax rates apply. The IRS began treating crypto assets as property in 2014.
Is There a Regulatory Legal Framework in the U.S. For Cryptocurrencies?
The U.S. has established a regulatory framework for cryptocurrencies, but it is still evolving and somewhat fragmented. Different federal and state agencies regulate various aspects of the cryptocurrency ecosystem. The key elements of this framework are regulated by agencies such as the SEC, CFTC, FinCEN, and the IRS, as well as state-level regulations.
Since 2014, the Internal Revenue Service (IRS) has classified digital assets as property, subject to capital gains taxes. However, the Securities and Exchange Commission (SEC) has taken a more cautious approach, classifying certain cryptocurrencies as securities. This legal classification requires crypto markets to register with the SEC and comply with securities regulations.
Using Cryptocurrency for the E-2 Visa: Can I Use Bitcoin or Other Cryptocurrencies as Investment Funds For My E-2 Visa?
Investment is defined in 8 CFR 214.2(e)(12) as an investment is the treaty investor’s placing of capital, including funds and other assets (which have not been obtained, directly or indirectly, through criminal activity), at risk in the commercial sense to generate a profit.
Whether it’s cryptocurrency or stock investments, it’s essential to trace the origin of the funds, starting from the original income source, through the investment accounts, and ultimately to the point of liquidation. According to USCIS, there is no specific restriction on the source of investment, provided that the funds are legally acquired and the source is properly documented. In this regard, using cryptocurrency assets as a source of investment is permissible, as long as the legal origin of the funds can be demonstrated.
How Can I Use Crypto For My E-2 Visa Application?
Whether it’s cryptocurrency or stock investments, it’s essential to trace the origin of the funds, starting from the original income source, through the investment accounts, and ultimately to the point of liquidation.
In order to use your cryptocurrency assets for an E-2 visa, you may liquidate your crypto holdings and convert the proceeds into U.S. dollars. This ensures compliance with the visa’s investment requirements and allows for the proper documentation of the source of funds. It is recommended to do this on crypto markets registered in the United States of America. It should be noted that some crypto markets are not registered in the United States and operate under different names, for example, Binance is registered in the United States as Binance US and Gateio is registered as Gate US.
How Does It Affect the E-2 Visa Application Process?
Although USCIS allows flexibility regarding the source of funds for E-2 investments, applicants must present extensive documentation to prove that their funds were acquired through legal means. In this context, the use of cryptocurrency assets as a source of investment will not cause any issues in the E-2 visa application process, as long as the source of the funds can be properly documented.
What Documentation Do I Need to Present?
- Proof of Cryptocurrency Ownership;
- Provide detailed records from the cryptocurrency exchange or wallet showing your ownership of the cryptocurrency;
- Exchange records showing the funds used to purchase the crypto, along with the source of the funds (bank accounts, loans, earnings, etc.)
- If the cryptocurrency was converted into US dollars before the investment, provide bank statements showing that these funds were deposited into a US bank account.
Can I Obtain an E-2 Visa with Cryptocurrency Loans?
If an investor wishes to avoid selling their cryptocurrency assets, they may opt to secure a loan by using their cryptocurrency as collateral. Various platforms provide crypto-backed loan facilities, which enable access to the necessary funds without the need to liquidate the assets. It is vital to ensure proper documentation of both the loan agreement and the collateral used to meet the requirements for the E-2 visa application.
Building a Business in the U.S. with Bitcoin and Other Crypto Loans
For E-2 visa applicants who wish to avoid liquidating their cryptocurrency assets, using crypto-backed loans to fund a US business is a viable option. Popular platforms offering crypto-backed loans include Coinbase, BlockFi, Nexo, and Celsius, which offer competitive rates and different terms depending on the collateral.
The investor seeking an E-2 visa can build the business using Bitcoin and other coins in the Investor’s possession as collateral.
What are the Benefits of an E-2 Visa with Bitcoin and Other Crypto Earnings?
- Applicants can use crypto-backed loans instead of liquidating assets, thereby keeping ownership of their digital assets while accessing funds to invest in a US business
- The crypto markets are different from some traditional investment sources since everything is recorded digitally, which makes the documentation process for the E-2 visa application faster.
What are the Risks and Disadvantages of an E-2 Visa with Bitcoin and Other Crypto Earnings?
- The volatile nature of cryptocurrency markets can make it difficult to accurately value your assets.
- Due to the volatile nature of the cryptocurrency markets, it can be difficult to accurately assess the value of your assets.
- Cryptocurrencies are relatively new and unfamiliar to many regulators. As a result, they may be subject to increased examination by immigration officials.
Work with Oguz Law’s Immigration Lawyers to Get an E-2 Visa with Crypto Earnings
Oguz Law’s experienced immigration attorneys understand the unique challenges and opportunities associated with using cryptocurrency earnings to secure an E-2 visa. Our team understands the constantly changing legal requirements and can provide personalised advice to help you achieve your immigration goals.
Whether you have built wealth in Bitcoin, Ethereum, or other digital assets, we can guide you through the steps necessary to use those funds in compliance with US immigration regulations. Contact us today for further assistance.
Frequently Asked Questions About Cryptocurrency and E-2 Visa
Does the U.S. Accept Bitcoin?
While the U.S. government doesn’t directly accept Bitcoin as payment for taxes or fees, an increasing number of businesses and cities accept cryptocurrency, including Bitcoin.
Is Binance Legal in the U.S.?
Due to regulatory complexities and legal requirements, Binance has launched a separate platform specifically for U.S. users, ‘Binance.US.’ This platform is regulated and compliant with U.S. laws.
Is Crypto Considered Foreign Currency in the U.S.?
The IRS has classified cryptocurrency as property, similar to stocks or real estate. This means it’s subject to capital gains taxes when sold for a profit.
Which Banks Support Bitcoin in the U.S.?
Some American banks do not directly accept Bitcoin payments. Instead, they offer services integrated with crypto markets. Some of these include Ally Bank, Mercury, JP Morgan Chase, etc.
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