More and more clients prefer to use funds from crypto trading, mining, or DeFI transactions to support EB-5 petitions.
Federal courts and agencies recognize crypto as both funds and property, allowing its use in EB-5 applications.
The main challenge is evidentiary: U.S. Citizenship and Immigration Services (“USCIS”) requires detailed proof for each transaction that the capital was lawfully earned and transferred.
This article explains the legal requirements, examines why crypto-funded petitions often receive Requests for Evidence (RFEs), and offers limited guidance for crypto EB-5 filings.
Crypto is “funds” under federal law
Federal appellate courts have on more than one occasion dismissed the notion that bitcoin does not come within the normal meaning of the term “funds.”
In 2026 the Second Circuit stated that “bitcoin qualifies as ‘funds'” since it “can be and is used as a currency to make sales and purchases,” referencing the First Circuit’s 2025 decision in United States v. Freeman ([1]).
That case itself drew upon earlier judgments, such as United States v. Murgio, 209 F. Supp. 3d 698 (S.D.N.Y. 2016), in which it was concluded that bitcoins are funds ([2]).
Furthermore, FinCEN described convertible virtual currency as a medium of exchange that “either has an equivalent value in real currency, or acts as a substitute for real currency.”
As such, FinCen considers individiduals who exchange virtual currency as money transmitters who have to be registered and who must keep records ([3]).
The Internal Revenue Service (“IRS”) considers digital assets, such as crypto, stablecoins, and NFTs, to be property. The IRS requires taxpayers to report all sales, exchanges, or dispositions even if no taxable gain results ([4]).
What the EB-5 statute requires
The definition of “capital” given in the Immigration and Nationality Act is wide-ranging but excludes “assets directly or indirectly acquired by unlawful means” ([5]).
Under the EB-5 Reform and Integrity Act of 2022, paragraph (L) of section 203(b)(5) of the INA require that the petitioner prove the capital arose from a lawful source and was acquired by lawful means.
This means that the petitioner must provide as evidence business registration records, tax returns filed, and any records of judgments.
The law also requires the identification of each person who transfers funds into the U.S. on the investor’s behalf, and gifts and loans are allowed only if they are made in good faith (not with the intention of avoiding the source-of-funds rules). ([5]).
These regulations state that assets acquired by unlawful means “shall not be considered capital” and provides the documentary evidence to the USCIS([6]).
The USCIS Policy Manual tells officers to verify that the investor is the legal owner of the capital and that it was acquired in a legal manner.
The Policy also includes separate lists of evidence for petitions submitted before and after May 14, 2022 ([7]).
The path-of-funds rule from the precedent decisions
The decisions of the Associate Commissioner from 1998 are still being used by USCIS when assessing the source of funds.
USCIS’s requests for additional information relating to crypto follow these established precedents.
- In Matter of Izummi, the petition was denied since “the record does not reveal from where these funds originated,” and the petitioner had “not documented the path of the funds, such as by wire-transfer records” ([8]).
- In Matter of Ho, the bank statements and letters were not adequate since “the wire-transfer receipt does not reveal from what bank account(s) the funds originated,” and the agency again stated that “simply going on record without supporting documentary evidence is not sufficient” ([9]).
- In Matter of Soffici, the funds held in the joint account could not be assigned to one particular investor, and the corporate funds were not those of the petitioner ([10]).
- The decisions are based upon Matter of Treasure Craft of California and Matter of Brantigan, which require the petitioner to carry the burden of proof in visa petition proceedings ([11], [12]).
For crypto, the “path of funds” requires tracing each coin or token from acquisition, through all wallets and exchanges, to the fiat wire that funded the investment.
Why crypto petitions draw RFEs
Deficiencies USCIS has raised in crypto-funded cases commonly include:
1. Transaction hashes and wallet addresses provided only as links or screenshots and not as printed and certified records.
2. No evidence to show that the petitioner has control over the wallets from which the proceeds were generated.
3. Exchange account statements that show a fiat withdrawal but do not include the crypto sales that caused it.
4. No evidence that income tax was reported and paid on each disposal, even though the IRS requires taxpayers to maintain “records documenting receipts, sales, exchanges, or other dispositions of virtual currency and the fair market value” ([13]).
5. Trades carried out on a decentralized exchange or in a peer-to-peer manner where there are no KYC/AML records.
6. Crypto funds mixed with other money, which may require the petitioner to show the legitimate source of every dollar.
USCIS now uses a machine-learning tool to classify and tag scanned evidence.
This enabled adjudicators to quickly access relevant information ([14]).
The DHS Inspector General confirms that USCIS uses AI to “expedite the processing and review of immigration and naturalization documents” ([15]).
Petitioners should expect every page of their financial history to be reviewed using AI.
The standard of proof
The petitioner must meet the preponderance of the evidence standard.
In Matter of Chawathe, the AAO held that a petitioner satisfies this burden when the claim is “probably true,” and officers must assess each document for relevance, probative value, and credibility ([16]).
USCIS EB-5 guidance confirms that a petitioner “does not need to remove all doubt” ([7]).
However, crypto RFEs often demand more extensive proof, so it is important to anticipate a wide-range of questions.
What is at stake if the petition fails
A response to an RFE must be submitted within the deadline that USCIS establishes, which may not exceed 12 weeks; and the petition can be denied as abandoned or on the basis of the existing record if no response is received ([17]).
Investors who are already in the United States can file Form I-485 at the same time as Form I-526E if a visa is immediately available ([18]).
However, the adjustment application is conditional upon the petition being approvable, and there is usually no appeal against a denial of the adjustment application ([19], [20]).
According to 2025 USCIS policy, the agency will serve a Notice to Appear when, after an adverse decision, the applicant is not lawfully present ([21]).
Consular processing is not always an available option: starting on January 21, 2026, the State Department suspended the issuance of immigrant visas to nationals of 75 listed countries ([22]).
Planning a crypto-funded EB-5 petition
1. Before filing, make sure to reconstruct the entire history, including the dates of the acquisitions, the cost basis, the wallet addresses, the exchange accounts, all the transfers. etc.
2. Print out the blockchain records and the exchange statements in the form of PDF files, label them, and associate each transaction hash with a specific line item in the tracing schedule.
3. Establish ownership of the wallet using the exchange’s KYC records, signed messages, or forensic attestations.
4. Make sure that the tax returns are accurate, fix any omissions before USCIS finds them, using AI.
5. Engage a separate forensic examiner, preferably one who has previously been a law enforcement investigator. Max Dilendorf regularly works with such expert witness to support client’s crypto EB-5 petitions.
6. Place the investment funds in a separate account so that there is no possibility of them being mixed up.
Prevention checklist
- Hold on to your tax returns for seven years and verify that each one shows activity involving digital assets.
- Keep the statements from your exchange account and your KYC confirmations.
- Make sure that gifts and loans are accompanied by evidence from the donor or lender regarding the source of the funds.
- List all the intermediaries who transferred money into the United States.
- Do not submit any links or media files that USCIS will not be able to open.
How Dilendorf Law Firm helps
Max Dilendorf has been at the forefront of digital asset and crypto law since 2017. Max represents clients in EB-5 petitions involving cryptocurrency.
Additionally, Max handled over 130 cybercrime cases related to digital asset theft and complex forensic investigations with retired law enforcement agents, providing the experience needed for complex crypto-funded EB-5 matters.
Contact US
At Dilendorf Law Firm, we assist U.S. and international investors with EB-5 petitions funded through cryptocurrency, digital assets, and other non-traditional sources of wealth.
Our team helps clients establish a lawful source and path of funds, prepare responses to USCIS Requests for Evidence (RFEs), document cryptocurrency transactions, and coordinate forensic tracing of digital asset transfers.
If you are considering an EB-5 investment using proceeds from crypto trading, mining, staking, DeFi, NFTs, or other digital assets, we can help.
Contact us at +1 212 457 9797 or email us at info@dilendorf.com.
This article is for general informational purposes only and does not constitute legal advice. Reading it does not create an attorney-client relationship with Dilendorf Law Firm. Attorney Advertising.
Sources
[1] United States v. Goklu, No. 24-767 (2d Cir. Apr. 7, 2026), slip op. at 12. https://ww3.ca2.uscourts.gov/decisions/OPN/24-767_opn.pdf
[2] United States v. Freeman, No. 23-1839 (1st Cir. July 29, 2025), slip op. at 17–18 (citing United States v. Murgio, 209 F. Supp. 3d 698 (S.D.N.Y. 2016)). https://www.ca1.uscourts.gov/sites/ca1/files/opnfiles/23-1839P-01A.pdf
[3] FinCEN, FIN-2013-G001, Application of FinCEN’s Regulations to Persons Administering, Exchanging, or Using Virtual Currencies (Mar. 18, 2013), pp. 1–3. https://www.fincen.gov/system/files/shared/FIN-2013-G001.pdf
[4] IRS, Digital Assets (definition; property treatment; reporting of dispositions). https://www.irs.gov/businesses/small-businesses-self-employed/digital-assets
[5] INA § 203(b)(5)(D)(ii), (E)(i), (L), 8 U.S.C. § 1153(b)(5), as compiled by GovInfo (COMPS-1376), pp. 58–60, 78–79. https://www.govinfo.gov/content/pkg/COMPS-1376/pdf/COMPS-1376.pdf
[6] 8 C.F.R. § 204.6(e), (j)(3) (2025). https://www.govinfo.gov/link/cfr/8/204?link-type=pdf§ionnum=6&year=mostrecent
[7] USCIS Policy Manual, Vol. 6, Part G, Ch. 2 (Eligibility Requirements), § A.4 Lawful Source of Funds and standard-of-proof discussion. https://www.uscis.gov/policy-manual/volume-6-part-g-chapter-2
[8] Matter of Izummi, 22 I&N Dec. 169, 194–95 (Assoc. Comm. 1998). https://www.justice.gov/sites/default/files/eoir/legacy/2014/07/25/3360.pdf
[9] Matter of Ho, 22 I&N Dec. 206, 210–11 (Assoc. Comm. 1998). https://www.justice.gov/sites/default/files/eoir/legacy/2014/07/25/3362.pdf
[10] Matter of Soffici, 22 I&N Dec. 158, 164, 168 (Assoc. Comm. 1998). https://www.justice.gov/sites/default/files/eoir/legacy/2014/07/25/3359.pdf
[11] Matter of Treasure Craft of California, 14 I&N Dec. 190 (Reg. Comm. 1972). https://www.justice.gov/sites/default/files/eoir/legacy/2012/08/17/2163.pdf
[12] Matter of Brantigan, 11 I&N Dec. 493 (BIA 1966). https://www.justice.gov/sites/default/files/eoir/legacy/2012/08/27/1553.pdf
[13] IRS, Frequently Asked Questions on Virtual Currency Transactions, Q1, Q4, Q16, Q46. https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions
[14] DHS, 2024 DHS AI Use Case Inventory (July 2025 revision), use case DHS-16, “ELIS Evidence Classifier Machine Learning (ML) Tagging Solution” (USCIS; Operation and Maintenance). https://www.dhs.gov/sites/default/files/2025-06/25_07_01_ocio_2024-dhs-ai-use-case-inventory_July_Revision.xlsx
[15] DHS Office of Inspector General, OIG-25-10, DHS Has Taken Steps to Develop and Govern Artificial Intelligence, But More Action is Needed to Ensure Appropriate Use (Jan. 30, 2025), p. 2, Table 1. https://www.oig.dhs.gov/sites/default/files/assets/2025-02/OIG-25-10-Jan25.pdf
[16] Matter of Chawathe, 25 I&N Dec. 369, 375–76 (AAO 2010). https://www.justice.gov/sites/default/files/eoir/legacy/2014/07/25/3700.pdf
[17] 8 C.F.R. § 103.2(b)(1), (b)(8)(iv), (b)(13)(i) (2025). https://www.govinfo.gov/content/pkg/CFR-2025-title8-vol1/pdf/CFR-2025-title8-vol1-sec103-2.pdf
[18] USCIS, EB-5 Immigrant Investor Process (Form I-526E; concurrent Form I-485 filing; conditional residence). https://www.uscis.gov/working-in-the-united-states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/eb-5-immigrant-investor-process
[19] 8 C.F.R. § 245.2(a)(2)(i), (a)(5)(ii) (2025). https://www.govinfo.gov/content/pkg/CFR-2025-title8-vol1/pdf/CFR-2025-title8-vol1-part245.pdf
[20] USCIS Policy Manual, Vol. 7, Part A, Ch. 11 (Decision Procedures) (no appeal from denial of adjustment; motion or renewal in removal proceedings). https://www.uscis.gov/policy-manual/volume-7-part-a-chapter-11
[21] USCIS Policy Memorandum PM-602-0187, Issuance of Notices to Appear (NTAs) in Cases Involving Inadmissible and Deportable Aliens (Feb. 28, 2025), § VI. https://www.uscis.gov/sites/default/files/document/policy-alerts/NTA_Policy_FINAL_2.28.25_FINAL.pdf
[22] U.S. Department of State, Immigrant Visa Processing Updates for Nationalities at High Risk of Public Benefits Usage (updated Feb. 2, 2026). https://travel.state.gov/content/travel/en/News/visas-news/immigrant-visa-processing-updates-for-nationalities-at-high-risk-of-public-benefits-usage.html