Tokenized assets in an IRA: what the documents say

The short answer, from the files

Ketju has 95 tokenized programs on file. Read against each issuer’s own documents, 2 name IRAs as eligible holders, 4 exclude them in writing, and 89 do not say. Of the 89 that do not say, 54 list the account types they onboard, most often individuals and entities, without naming IRAs; 35 name no account types at all.

Silence is not permission. An IRA is not a person. It is a trust or a custodial account, and the trustee or custodian, not the client, becomes the holder of record. Unless a program’s terms say it will onboard that custodian and allowlist a wallet the custodian controls, an advisor has nothing in writing that says it will. The rest of this page sets out why the custodian matters, which tax rules reach tokens, and what each program says.

An IRA holds only what its custodian holds

The Internal Revenue Code defines an individual retirement account as “a trust created or organized in the United States for the exclusive benefit of an individual or his beneficiaries,” and requires that “The trustee is a bank” or another person who shows the IRS that it will run the trust as the section requires. A custodial account counts as such a trust “if the assets of such account are held by a bank” or an approved person, and its custodian is then treated as the trustee.¹ IRS Publication 590-A says it in one line: “The trustee or custodian must be a bank, a federally insured credit union, a savings and loan association, or an entity approved by the IRS to act as trustee or custodian.”²

Two more rules shape how tokens get into an IRA. Contributions, except rollovers, “must be in cash,” so a client cannot move tokens from a personal wallet into an IRA as a contribution; the IRA has to buy them.² And the account’s assets “will not be commingled with other property except in a common trust fund or common investment fund.”¹ A wallet that holds both the IRA’s tokens and the client’s own is the plainest case of commingling there is.

A self-directed IRA lets the owner choose investments. It does not let the owner hold them. The Tax Court drew that line in McNulty v. Commissioner, decided on 2021-11-18.³ Donna McNulty opened a self-directed IRA with Kingdom Trust as custodian. The IRA bought units in a single-member LLC that she managed, and the LLC spent $374,000 on 320 one-ounce American Eagle gold coins in 2015 and $37,380 on 2,000 one-ounce silver coins in 2016. The dealer shipped the coins to her home, where she kept them in a safe. The court held that she received a taxable distribution equal to their cost when she received them: “Personal control over the IRA assets by the IRA owner is against the very nature of an IRA.” The LLC made no difference. A custodian, the court said, must “maintain custody of the IRA assets,” and “When coins or bullion are in the physical possession of the IRA owner (in whatever capacity the owner may be acting), there is no independent oversight that could prevent the owner from invading her retirement funds.”

The case concerned coins, not tokens. Its test was control, though, and a private key is control: whoever holds it can move the tokens without anyone’s leave. The IRS makes the same point in general terms: “If your IRA is invested in nonpublicly traded assets or assets that you directly control, the risk of engaging in a prohibited transaction in connection with your account may be increased.”² So the first question about a tokenized holding in an IRA is not what the token is. It is who holds the key.

What the programs say about wallets

The files show why the key question is practical. 47 of the 89 programs with a readable contract allowlist wallets on at least one chain: the contract refuses to move tokens to a wallet the issuer has not cleared. Fidelity says of its FDIT fund: “Only wallets that are approved by the transfer agent are authorized to purchase, redeem and hold OnChain class shares of the fund. Investors may not hold their shares in any other wallet.”⁴ For an IRA, the investor the issuer onboards has to be the custodian, and the wallet on the list has to be one the custodian controls. Some programs take the key away from the holder altogether. BNY’s Dreyfus On-Chain Liquidity Fund says “the wallet must be maintained by a digital wallet provider (self-custodied wallets are not supported at this time).”⁵

31 readable programs put no allowlist on any contract read. Their tokens can land in any wallet, a custodian’s included, but a token that moves freely is not one the IRA may redeem. PAX Gold shows the gap. Anyone may hold PAXG on chain, yet “Only verified Customers may purchase PAXG from us or convert or redeem PAXG from us.”⁶ An IRA custodian that is not a verified Paxos customer can hold PAXG and sell it; to redeem, it would have to open the Paxos account itself.

The exit matters for the same reason. 48 of the 95 programs can pay a redemption in stablecoins, to a wallet. For an IRA, that wallet has to be the custodian’s; paid anywhere else, the money has left the custodian’s hands.

What each program’s terms say

These are the programs whose documents speak to IRAs, in the files’ words.

Name IRAs as eligible (2).

• ARK Venture Fund (ARKVX), tokenized by Securitize (US retail investors): IRAs may purchase.⁷ The file adds: “Securitize’s onboarding asks for a photo ID and a wallet; the documents read do not say whether it opens entity or retirement accounts for this token, or list states.”
• Streamex GLDY (US accredited investors): Individuals, IRAs, revocable trusts, other trusts, entities and family offices that meet the accredited-investor test; a benefit plan answers a separate questionnaire, and the servicer may force a plan to redeem. The document: “Individuals, Individual Retirement Accounts or Plans, and Revocable Trusts.”⁸

Exclude them in writing (4).

• Bitwise Crypto Carry Fund (USCC) (US qualified purchasers): Not IRA eligible.⁹
• BNY Dreyfus On-Chain Liquidity Fund (BCLXX), BLIQUID token (US accredited investors): Not individuals or retirement plans. The document: “Shares of the fund are generally not eligible for retirement plans or individual investors.”⁵
• Circle USYC (Not offered to US persons): Entities only. Individuals, trusts, and IRAs are not offered.¹⁰
• Franklin OnChain U.S. Government Money Fund (FOBXX), BENJI token (US retail investors): Individuals through the app and institutions through the portal. No IRAs, Roth IRAs, or employer retirement plans. The document: “The Fund does not permit investments by employer sponsored retirement plans, SIMPLE-IRAs, SEP-IRAs, SARSEPs or 403(b) plan accounts, IRAs, IRA Rollovers, Coverdale Education Savings Plans or Roth IRAs.”¹¹

Naming IRAs is not the end of it. The investor floor still applies to the account, and a fund can admit IRAs while the token route does not say it will open one. The files record the fund’s terms and the distributor’s onboarding separately for that reason, and they do not always agree.

The 89 that do not say are the hard cases, because most of them list other account types. Paxos is typical. Ketju’s file records: “Individuals, for personal use, and companies or other entities. The terms do not name trusts or IRAs.” The general terms Paxos cites say: “If you register as an individual Customer, you agree that you will use the Paxos Platform for your personal use only.”¹² Nothing there forbids an IRA custodian from opening an entity account. Nothing says Paxos will open one, either.

39 programs are not offered to US persons at all, and an IRA does not escape that by being an account. Regulation S counts as a US person “any trust of which any trustee is a U.S. person” and any non-discretionary account “held by a dealer or other fiduciary for the benefit or account of a U.S. person.”¹³ Both describe the ordinary IRA of a US client.

One program on file works differently, and it is the one to watch. DTC’s tokenization service keeps each share registered to DTC’s nominee and recognizes only its participants, the brokers and banks, as holders. DTC’s request, attached to the SEC staff letter, allows that “a Participant may register a wallet for the benefit of its customer and even provide that customer with the keys to the wallet,” but “DTC would only recognize the Participant as the entitlement holder and the Participant would be fully responsible for the activity in the Registered Wallet.”¹⁴ For an IRA, that moves the question to the broker: whether it will register a wallet for a retirement account, and who will hold that wallet’s key. The file adds: “No Participant has published retail terms as of 2026-09-22.” The DTC file will show the first participant’s terms when they appear.

Gold and silver tokens: the collectibles rule

Metal meets a rule of its own. Section 408(m) treats an IRA’s acquisition of “any collectible” as a distribution “in an amount equal to the cost to such account of such collectible,” and the statute’s list of collectibles includes “any metal or gem” and “any stamp or coin.”¹ Publication 590-A adds that the 10% additional tax on early distributions may apply.²

The exception covers certain US-minted gold, silver, and platinum coins, coins issued under state law, and gold, silver, platinum, or palladium bullion at least as fine as a futures exchange requires for delivery, “if such bullion is in the physical possession of a trustee described under subsection (a) of this section.”¹ In McNulty the court read that clause and held that it “does not create an exception to the custodial and fiduciary requirements of section 408(a).”³ It limits what an IRA may hold. It does not relax who must hold it.

That last clause is the hard one for a token. A metal token’s bars sit in the issuer’s vault, not with the IRA’s trustee. PAX Gold is the clearest case on file. Paxos Trust holds London Good Delivery bars in segregated accounts, and its terms say: “Your PAXG tokens are akin to a warehouse receipt representing your beneficial ownership of a pro rata portion of Allocated Gold.”⁶ Whether a receipt for bars in someone else’s vault is bullion “in the physical possession of a trustee” is a question the statute does not answer and the files cannot. It belongs to the IRA custodian and to tax counsel, in writing, before the purchase.

19 programs on file hold gold, silver, or another commodity. By what the holder owns: 7 are receipts for metal a custodian holds; 6 are programs whose documents do not say which; 5 are notes or swaps that pay like the metal; one is shares in a company that owns the metal. 15 are open to US retail investors. One names IRAs: Streamex GLDY, whose holder owns shares in a company that owns the metal, not the metal itself. Whether a share of a company that owns gold is itself a collectible is again a question for tax counsel.

Prohibited transactions, in brief

A prohibited transaction is, in the IRS’s words, “any improper use of your traditional IRA account or annuity by you, your beneficiary, or any disqualified person.” Disqualified persons include the owner’s fiduciary and family, and a fiduciary includes anyone who “Provides investment advice to your IRA for a fee, or has any authority or responsibility to do so.”² The advisor on the account is usually one. The IRS gives four examples: borrowing money from the IRA, selling property to it, using it as security for a loan, and buying property for personal use with IRA funds.

Each has a token form. A client who sells tokens from a personal wallet to the IRA is selling property to it. An IRA that posts tokens as collateral for a loan, in a lending market or anywhere else, is using the account as security, and the Code treats “the portion so used” as distributed.¹ Lending markets now take tokenized stocks as collateral; the tokenized-securities guide walks through the first one. Buying tokens from the advisor or from the client’s family raises the same question in a new wrapper.

The cost is steep. If the owner engages in a prohibited transaction, “the account stops being an IRA as of the first day of that year,” and the owner is treated as receiving all of its assets at fair market value on that day.²

The 401(k) side

Employer plans answer to the Department of Labor under ERISA as well as to the IRS. On 2022-03-10 the Department told 401(k) fiduciaries to use “extreme care” before adding crypto to a plan menu. On 2025-05-28 it rescinded that release in full, saying the standard “is not found in the Employee Retirement Income Security Act (ERISA),” and went back to “neither endorsing, nor disapproving of, plan fiduciaries who conclude that the inclusion of cryptocurrency in a plan’s investment menu is appropriate.” A footnote extends the same reasoning to assets “marketed as ‘tokens.’”¹⁵

An executive order of 2025-08-07 made it policy that plan participants should have access to funds that hold alternative assets, and defined those to include “holdings in actively managed investment vehicles that are investing in digital assets” and “direct and indirect investments in commodities.”¹⁶ The Department answered on 2026-03-31 with a proposed rule: a process that, if a fiduciary follows it in choosing a plan’s investment options, earns a presumption of prudence. The proposal says there is “no per se rule respecting the inclusion of actively managed investment vehicles that are investing in digital assets.” Comments closed on 2026-06-01.¹⁷ A proposal binds no one until the Department adopts it.

None of this puts a token in a participant’s account. The order speaks of funds that invest in digital assets, and a participant picks among the options the plan’s fiduciary selects. Where a plan offers a self-directed brokerage window, the collectibles rule follows the participant there: section 408(m) reaches “an individually-directed account under a plan described in section 401(a).”¹

What the advisor must verify

• The program’s current documents admit IRAs by name, for the token route the client will use and not only for the fund. Keep the page and the date.
• The IRA’s custodian will hold this token: the custodian is the investor the issuer onboards, and the allowlisted wallet is one the custodian controls, not the client.
• The account clears the program’s investor floor and minimum, and the program is offered to US persons.
• For a metal token: what the holder owns (the metal, a receipt, a share, or a note), where the metal sits, and the custodian’s and tax counsel’s written view on section 408(m).
• No disqualified person is on the other side of the purchase, and the tokens will not be pledged or lent as collateral.
• How the IRA exits: who may redeem, in what, and whether the proceeds land in an account the custodian holds.
• The event that would reopen the decision: a change to the issuer’s terms, the allowlist, the custodian’s policy, or the key that can freeze the token.

Every program, with its floor, minimum, IRA reading, and freeze key, is in one table at Can my client hold it?. Ketju’s eligibility files quote each issuer’s terms and date each reading. This page describes what the documents say; it is not tax or legal advice, and the custodian and counsel decide.