Bringing crypto to America: strategies for non-U.S. residents

Full transcript

0:11 Hi everyone, I’m Max Dilendorf, an attorney based in New York.

0:15 Since 2017, I’ve focused on crypto and digital asset law, and my firm works with international clients who are looking to bring their crypto into the United States.

0:26 Welcome to this new series, where I’ll be discussing often misunderstood topic, and that is: Onshoring Crypto in the U.S. as a Non-U.S. Resident.

0:38 More and more international clients move their crypto to the U.S. to invest in things like U.S. real estate, financial markets, startups and other U.S.-based opportunities.

0:51 But once that crypto enters the U.S.—whether it’s used to buy property, fund a business, make an investment, or even deposited into a U.S. account—it can be treated as U.S.-situs property.

1:10 That means it may fall under the U.S. gift tax and estate tax system, which can apply very differently to non-U.S. residents. In fact, non-U.S. residents do not receive the same gift and estate tax exemptions or protections as U.S. citizens and residents, so proper planning is critical before moving digital assets to U.S.

1:37 For example, U.S. residents currently have a lifetime gift and estate tax exemption of roughly $14 million, while a non-U.S. resident get only a $60,000 exemption for U.S.-situs assets.

1:53 So if you use crypto to buy U.S. real estate or invest in a U.S. business, and later decide to gift that asset, the portion above $60,000 could face up to 50% U.S. transfer tax. For example, gifting a $5 million New York apartment, could result in approximately $2 million in U.S. gift tax for a non-resident. It works the same way with estate taxes. If a non-U.S. resident owns valuable property in New York, Miami, Aspen, or anywhere in the U.S., and passes away, the surviving relatives could owe up to 50% estate tax on the value of the property — even if the relatives live outside the United States.

2:45 That’s why it’s critical to put the right structure in place before bringing crypto into the United States. There is no one-size-fits-all solution.

2:56 The right approach depends on your goals, your family situation, and your country of residence.

3:07 Your objectives drive the structure. Maybe you want to buy U.S. real estate, fund your children’s education or establish a family foundation for long-term generational planning.

3:21 Or maybe you are looking to use crypto to fund an EB-5 investment to get a U.S. green card.

3:28 Each of those objectives requires a different legal, tax, and compliance strategy — especially when the source of funds is crypto. For example, if you’re considering EB-5, the stakes are even higher. The federal program has strict rules around tracing, documenting, and structuring crypto-derived funds. Your structure will also depend on your country of residency and if it has a tax treaty with the U.S.

4:06 Only a limited number of countries have tax treaties with the US, and treaty benefits can sometimes provide more tax-efficient planning options.

4:16 But for clients from countries without treaties, planning must be even more precise.

4:22 One of the biggest mistakes I see is when non-U.S. residents form a basic Delaware or New York LLC, fund it directly with crypto, and then use it to buy real estate or to make an investment.

4:36 In most cases, this creates: (1) Unnecessary U.S. tax exposure; (2) Gift and estate tax risk; (3) Zero creditor protection; (4) No estate-planning. A better approach may involve an offshore foundation or holding entity that owns the U.S. investment structure beneath it, or a U.S. trust-based framework tailored to your jurisdiction and objectives.

5:05 Asset protection is another huge concern. Ask yourself, how protected is my crypto from potential creditors if I move them to the U.S.? What kind of structure lets me keep reasonable control of my digital assets while providing real protection?

5:23 For example, setting up an irrevocable trust in a state like Wyoming or South Dakota can be a great estate-planning tool, but it also usually means you’re giving up day-to-day control—which may or may not be right for your needs. So the bottom line: Onshoring crypto into the U.S. can offer good opportunities, but doing it incorrectly can be extremely expensive. A basic LLC is almost never the right answer. This series will help you make informed, strategic decisions and avoid costly mistakes. In the next episode, we’ll cover the most common errors non-U.S. residents make when buying U.S. real estate with crypto, including what to watch for in today’s crypto-friendly real estate market.

6:14 Thanks for joining me, and I’ll see you in the next episode!

A transcript of the recording, so it reads as speech rather than as prose. It explains the law in general terms and is not advice on your own situation, which turns on facts this video cannot know.