Using crypto to buy or sell U.S. real estate

Full transcript

0:09 [Music] Hi, I’m Max Dilendorf, attorney and founder of Dilendorf Law Firm in New York.

0:18 Since 2017, our firm has been at the forefront of crypto legal services — advising clients on crypto estate planning, asset protection, handling cybercrime litigation, helping real estate sellers, investors, and developers navigate crypto real estate transactions.

0:39 If you’re a property owner thinking about selling your real estate for crypto, yes — it’s possible. But it comes with a unique set of legal and compliance considerations.

0:53 Let’s walk through the key things you need to know: First, before accepting crypto from a buyer, you need to verify the source of funds.

1:02 That means completing a blockchain title search to make sure the digital assets weren’t involved in illicit activity or circulating on the dark web.

1:12 Just like real estate transaction, when you are buying a property you want a clean title, or in this case, you want clean crypto.

1:21 You’ll also want to know how the buyer holds their crypto. Are they sending it from a regulated exchange like Coinbase? Or is it coming from a DeFi platform or a self-custody wallet like MetaMask or Ledger?

1:35 Each option carries different compliance, traceability, and risk considerations — and the answer will impact how you structure and document the transaction.

1:46 Second, you need to understand your role from a compliance standpoint. If you're accepting crypto directly from a buyer that’s using a self-custody wallet, you could be deemed a money transmitter under federal and state law.

2:03 That classification triggers Know Your Customer and Anti-Money Laundering obligations — and violating those can lead to serious penalties.

2:12 Next, there are tax implications. Crypto is not legal tender in the U.S. — the IRS treats it as property.

2:21 So when you sell your real estate and accept crypto as payment, it’s considered a property-for-property exchange, and each asset carries its own tax basis.

2:34 You’ll need to account for any capital gains or losses when filing your return.

2:40 Another issue is price volatility. What happens if the value of the crypto drops 20% between contract signing and closing?

2:49 It’s critical to clearly allocate who bears the market risk in the contract.

2:55 Then there’s the matter of escrow. Who will hold the crypto deposit during the transaction? Does your escrow agent have the right technology, licensing, and insurance to custody digital assets?

3:10 Traditional escrow services may not be equipped to handle crypto.

3:15 Bottom line: selling real estate for crypto is possible, but it must be carefully structured to avoid legal, tax, and regulatory pitfalls.

3:27 If you’re considering accepting crypto in your next real estate sale — whether it's Bitcoin, Ethereum, or stablecoins — reach our team at Dilendorf Law.

3:41 Thanks for watching.

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.