BlockMint Review – Legit Crypto IRAs?

BlockMint Review

by Anders

November 3, 2020

Is BlockMint legit? Can you trust them? Should you put your hard earned savings into the cyrpocurrency IRAs they offer?

In this BlockMint review I'll be going over what you should know about this company before getting involved with them, including what exactly they offer, how to open up an IRA account with them and invest in cryptocurrency, the fees you'll have to pay and more.

Don't invest anything until after you read this. You'll be glad you didn't.

Let's begin this review with and overview of the company.

Overview

  • Name: BlockMint
  • Website: blockmint.com
  • Service: Cryptocurrency IRA provider

What Is BlockMint?

BlockMint is a cryptocurrency IRA provider that gives people the opportunity to invest in cryptocurrencies for their retirement and grow their funds tax-deferred (the main benefit of an IRA). They don't have many crypto investment options, but do offer the chance to buy into a handful of the most popular cryptocurrencies, including Bitcoin, Ethereum, Litecoin and more.

The process of getting started, which I'll go into more detail on later, is simple. You can simply rollover funds from an existing retirement account to BlockMint tax-free and then invest - a minimum of $10,000 is required for your initial investment.

Diversifying your retirement portfolio by investing in things like precious metals and cryptocurrencies could be a smart move. While the crypto market is still incredibly volatile a price predictions by analysts are all over the place, this market holds a heck of a lot of potential and investing in some of the bigger cryptocurrencies at least mitigates risk to some extent. This is why the opportunity to hop on the crypto bandwagon has been teased so much lately, such as in the "Crypto 66" teaser and that for Jeff Brown's Blockchain stock picks.

BlockMint makes the entire process of investing in this sector simple, however the fees they charge make us here at Green Bull Research hesitant to recommend actually using them.

Company Info:

Their address is listed at:

1990 S. Bundy Dr., Suite 600, Los Angeles, CA 90025

... and phone number is...

  • 1-800-844-6468, which seems to be the only way to contact them - couldn't even find an email address listed on the website.

I thought I recognized the address listed before, and the reason is because the BlockMint company spun off of Lear Capital (I believe in 2020), which is a full-service precious metals dealer that has been around since 1997 and has went through some rough times - lawsuits and lots of complaints. 

However, don't let the parent company's somewhat bad reputation spoil your opinion of BlockMint. Let's take an indifferent look at what this company has to offer and whether or not it'd be worth using as a means of investment to get into tax-deferred crypto retirement investments.

The good news is that Lear Capital specializes in precious metals IRAs, so they have plenty of experience with IRS-approved IRA accounts and know how to handle retirement investments.

The People Behind It:

On the website they don't tell us much about the company. There are no names provided for the founders or the people running the show. However, since they do tell us the company was spun off of Lear Capital, it might be okay to assume the same founder and CEO.

Over at Lear Capital Kevin Demerit is the Founder and Chairman. He's an investment analyst who has appeared frequently on talk radio over the years, boasting of having had over 1,000 interviews total, and has written a somewhat successful book help people understand how the economy works, titled The Bulls, The Bears and The Bust. As you can imagine, Demerit is very bullish on alternative investments such as precious metals and cryptocurrencies. And the CEO is John Ohanesian, whom has a strong business management background, most notably having been the President and CEO of the hair restoration company Bosely - seems the management is strong here.

What They Offer

As we know already, BlockMint offers is the ability to invest in cryptocurrency via IRAs. So if you are looking to diversify your IRA retirement account and are interested in crypto, this could be for you.

Essentially BlockMint is just a middleman that facilitates the transactions, such as setting up one's IRA account and the funding, but I'll get more into this in a bit.

The basics of it are that you can open a self-directed IRA account through BlockMint and invest in a handful of popular cryptocurrencies. At the moment, those available for investment include:

  • Bitcoin (BTC) - This is the largest cryptocurrency available. It was created in 2009 and brought a new type of decentralized digital currency model to the world. Currently it holds the majority of the cryptocurrency space's market cap.
  • Ethereum (ETH) - Different from Bitcoin, Ethereum is a decentralized platform for money and applications. The "cryptocurrency" one can invest in here is called "Ether" (ETH) and is the currency used on the decentralized platform.
  • Litecoin (LTC) - This is nothing more than a popular cryptocurrency that is similar to Bitcoin but was established for faster transactions. It holds potential because it is "liter" and has much faster transactions speeds than the popular Bitcoin.
  • Ripple (XRP) - Ripple works as a cryptocurrency and a payment network for financial institutions. It has a lot of potential and is becoming increasingly adopted by large banks... but of course investing in cryptocurrencies is often looked at as a way to get away from the large banks having so much control.
  • BTC Cash (BCH) - Another strict cryptocurrency, BTC Cash, aka Bitcoin Cash, is a spinoff of Bitcoin (although sometimes called THE real bitcoin) that can handle more transactions per second.
  • ETH Classic (ETC) - This is the original Ethereum blockchain. The Ethereum listed above was the result of a fork that reversed the results of a DAO hack that happened to the network.

This is what they have available at the moment, but there will likely be more available as time goes on.

How It Works

Hold off on this for now because there are still some very important things I need to go over, but when the time comes and if you want to open a cryptocurrency Self-Directed IRA account through BlockMint then the first step would be to fill out the online application. After this an account representative will be in contact with you. Here you'll be able to ask any questions and move on to the next step, which is funding your account.

Funding your account can be done tax-free if you have an existing retirement account that you'd like to transfer your funds from. Funds from IRAs (includes IRAs, Roth IRAs, SEP IRAs, and Simple IRAs) can be brought over tax-free, and funds can also be rolled over from most 401(k)s, 403(b)s,457(b)s Thrift Savings Plans, and TIAA CREF plans.

If you're not sure if your current retirement account is eligible for a tax-free rollover you can always contact the specialists at BlockMint.

It's also important to note that funds must come from an existing retirement account. You will not be able to invest cryptocurrencies you already own in this account or deposit money from your bank account to make your initial purchase.

Another requirement is that there is a minimum investment of $10k needed.

Costs & Fees

The fees are a bit steep at BlockMint. All in all, you'll have to pay several different types of fees to have a cryptocurrency IRA account through them, the most costly of which are the transaction fee...

Transaction Fees

After transferring funds over to BlockMint you will be able to select what cryptocurrencies you want to invest in out of the handful that they offer.

They slap a 15% fee onto this purchase, which they state "is only an approximation, which is also subject to change. The actual fee on any particular transaction could be lower or higher" - not sure what this means. Discounts are available based on the volume of your purchase, as is stated on the website, but I don't know the specifics of this.

In addition to this, there is also a 2.5% purchase transaction fee and a 1.0% sell transaction fee charged by Equity Trust, which is the custodian for the IRS approved accounts provided through BlockMint.

BlockMint doesn't actually store your cryptocurrency for you. They use the 3rd party Equity Trust, which I'll talk more about in a bit.

So, in a nutshell, you have have to pay BlockMint a 15% fee on your cryptocurrency purchase plus Equity Trust a 2.5% fee, and then also pay Equity Trust a 1.00% fee when selling.

Maintenance Fee

Additionally you'll have to pay an account maintenance fee of $195 per year.

Storage Fee

And lastly, there is the storage fee of 0.05% per month fee on your IRA balance.

So, that's a lot of fees. Let's break it down and get a better understanding of just how much you'll have to pay with an example.

Fee Example: Let's say you rollover $20,000 from an existing IRA account to BlockMint. Then, you decide to put all of that money into a Bitcoin inside your new cryptocurrency IRA.

  • $20,000 minus the 15% purchase fee from BlockMint = $17,000
  • Right off the bat, you lost $3,000 from that fee
  • Then you have $17,000 minus the 2.5% purchase fee from the custodian, Equity Trust, which means your account now = $16,575
  • Then you have that annual account maintenance fee of $195/yr... this brings it down to $16,380
  • And lastly, let's not forget about the 0.05% storage fee that is charged on a monthly basis - not bad, but still about an $8 monthly charge for this size of account

Quite a lot of fees here.

Is BlockMint Safe?

When it comes to investing in cryptocurrencies, you have to be careful how you go about doing so. With digital currencies like this the last thing you want is for some hacker to get into your digital wallet and steal your funds.

If you are looking to invest in crypto long-term and don't need the liquidity that is needed for daytraders, then the safest bet is to go with a cold-storage option, which is when your cryptocurrency is stored offline in some sort of hardware wallet.

*Well, actually the cryptocurrency is never stored offline and is always in the blockchain, but the private keys that provide access to your digital wallet will be stored offline.

The good news is that BlockMint knows what they are doing in this regard and all IRA investments are stored in two separate cold storage vaults - safe from hacking.

BlockMint doesn't actually handle your crypto investments themselves. Instead, they simply facilitate the transaction with the IRA custodian Equity Trust which handles the cold storage and everything. 

As stated in the Transaction Agreement:

BMI facilitates the purchase or sale of Digital Currency. BMI does not make a market in any of the Digital Currencies it sells or hold digital keys for Customers.

Equity Trust is a regulated South Dakota Trust company that is audited by 3rd parties to ensure account protection. They've been around since 1974 and have been a self-directed IRA custodian since 1983. Furthermore, they are also the custodian of other popular cryptocurrency IRA provides on the market, such as BitIRA for example.

The Opportunity Here

Investing in cryptocurrencies seems to be either loved or hated. Many people, such as well-known investors like Warren Buffet, see Bitcoin and other cryptos as worthless with no real value, while others see real-use cases and big future potential.

Big Profits

While one of the downsides to investing in such is the extreme market volatility, the major upside here is the potential to make big profits, with some predictions that Bitcoin will hit $398k by 2030. Not only that, but portfolio diversification is key and alternative investments such as cryptocurrencies can be good choices during market downturns.

Lower Taxes

The lure of this type of investment vehicle is that funds grow tax-free, and will either be taxed upon distribution (Traditional IRA) or contribution (Roth IRA).

Bitcoin and other cryptocurrencies are taxed as property, which is the way the IRS sees them. This has been the way it's been since 2014 and what this means is that cryptocurrencies held in IRAs are taxed the same way as stocks and bonds.

Pros v Cons

Pros

  • Cryptocurrency investing is good for portfolio diversification
  • With a crypocurrency IRA you can grow your money tax-deferred
  • BlockMint is partnered with Equity Trust, which is the custodian to all cryptocurrency holdings - they store everything offline, meaning it's safe from the threat of hacking

Cons

  • The cryptocurrency market is very volatile
  • High fees at BlockMint
  • Non-liquid assets - aren't supposed to touch your investment until retirement age (penalized if you do)

Conclusion - Is BlockMint Worth It?

Okay, so let's do a quick recap here. BlockMint is a cryptocurrency IRA provider. What they do, in a nutshell, is facilitate the IRA account setup, the rollover of funds from an existing retirement account over to the new cryptocurrency IRA account, and provide an account portal so that clients can easily access and view their funds. I mentioned that they don't actually store your crypto funds themselves, and instead use a 3rd party (Equity Trust), but this shouldn't devalue the service being provided at all. This is how most cryptocurrency IRA providers operate at the moment.

The service provided by BlockMint seems to be good quality from what I have found and the company is definitely not a scam.

However, the fees are just too darn high. If you just take the transaction fees (purchase fees of 15% + 2.5% and the 1% selling fee), this means your crypto investment will have to rise 18.5% just for you to breakeven!

Sure, with cryptocurrencies there is still plenty of profit opportunity even with big fees like this, but still... this is just too much for us to recommend.

Other (Better) Options

If you have to pay fees as high as 18.5% is opening a cryptocurrency IRA even worth it?

The point of opening such an account in the first place is to save on taxes. But fees are fees. It doesn't matter whether or not your money is going to the IRS or to BlockMint... either way you aren't getting to keep those fees.

Just think about it. If you were to simply invest your money in cryptocurrency by yourself, such as by buying it through an exchange like Coinbase, Binance, Bittrex, etc., and if you were to then hold onto it for a year the profits would qualify as Long-Term capital gains and the taxes would be much less. Of course when you do cash out you'd be taxed on the profits, which we hope would be exponentially higher than your initial investment... but it's still worth thinking about.

That said, if you are certain a crypocurrency IRA is what you want to get involved with then there are other options available, places like BitcoinIRA being one of the biggest providers of such out there - we'd recommend taking a look at this place.

In the end it's your decision what you do. As always, do your own due-diligence and decide for yourself.

Let us know what you think of it all in the comment section below. What do you think of BlockMint? Are they worth using?

About the author 

Anders

Anders is the founder and chief editor of Green Bull Research. When he's not investigating new opportunities and adding to his portfolio, you might find him taking a nature walk or reading a Steven Pressfield novel.

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