This article will explain the insurance Alto has, how custody works, and how assets are kept "safe" at Coinbase.
What happens if Alto ceases to do business?
IRA funds and assets are separate from Alto’s own cash and assets. Your IRA account funds and assets belong to you, are held for your benefit, and are not commingled with our assets and are not available to our creditors. If we stopped doing business, you would be able to have your assets moved to another custodian. The custodian is overseen by state regulators who ensure assets are protected in such a situation.
Does Alto have Errors & Omissions (E&O) insurance (aka, professional liability insurance)?
We maintain Errors & Omissions and cyber liability insurance to protect ourselves against claims relating to negligence or data breach. We are providing a service under terms that have limits of liability, just like any technology and service provider. We're only able to keep fees low by managing and limiting our risks; we do not provide guarantees that the service will be 100% error-free. Also keep in mind we have no responsibility for the conduct or terms of any offering of securities by any issuer, investment partner or other third party, or the outcome of any investment you choose to make.
Is Alto regulated by the Securities Investor Protection Corporation (SIPC)?
No, we are not regulated by SIPC. This is because Alto Solutions, Inc. d/b/a AltoIRA (Alto) is an administrator of self-directed individual retirement accounts. We are not a registered or licensed broker, dealer, broker-dealer, funding portal, cryptocurrency exchange, investment advisor or investment manager. As such, we facilitate your use of retirement funds to make self-directed investments in alternative assets—things outside the public markets—but we do not perform brokerage services or provide individual investment advice or recommendations about any specific security offering, investment, or asset.
Who is Alto regulated by?
Our policies and records are subject to audit and oversight by the New Mexico Financial Institutions Division Regulation and Licensing Department. We maintain stringent anti-money laundering and information security policies and compliance training for all employees.
Is my money held by Alto insured?
All cash held by us for the benefit of your IRA is insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000. In addition, we maintain fidelity bonds and crime insurance to protect against breach of duty by personnel.
*Note: Alto Solutions, Inc. d/b/a AltoIRA (“Alto”) is an administrator of self-directed individual retirement accounts and is not a registered or licensed broker, dealer, broker-dealer, funding portal, cryptocurrency exchange, investment advisor or investment manager. Neither Alto nor any of its affiliates is an FDIC-insured bank. Banking services provided to Alto are by BankProv (Bank) Member FDIC / Member DIF. The FDIC insures each AltoIRA account holder up to $250,000 based on deposit insurance rules in the event of bank failure. Certain conditions must be met for pass-through insurance coverage to apply. The Depositors Insurance Fund (DIF) insures all deposits above the FDIC depositor limit when placed with BankProv. Securities and Crypto assets are not insured by the FDIC, may lose value, are not deposits or other obligations of the Bank, and are not guaranteed by the Bank. Alto does not control or monitor the operation or conduct of the Bank or any third-party investment platforms, funds, cryptocurrency exchanges or issuers, or their offerings. Whenever making an investment decision, investors should consult with their tax attorney or financial professional. Investors are responsible for conducting their own due diligence regarding investments, for using their Alto accounts in compliance with law, and for all tax and other risks and obligations arising from account transactions.
How are assets kept and insured at Coinbase?
After funding your Alto CryptoIRA, you can invest through our platform in any cryptocurrency offered on the Coinbase exchange.
Funds transferred to Coinbase, whether held in cash or invested in cryptocurrencies, are secured in hot and cold storage. Coinbase maintains a commercial crime policy that provides an insurance coverage limit of $320 million (per incident and overall), as well as a $3 million cyber crime insurance policy.
What are the risks of investing in cryptocurrency?
Since your IRA is self-directed, you are solely responsible for any investment or transfer you choose for your account. Alto assumes no responsibility or liability for the acts or omissions of any provider or issuer of any investment or other third party, including Coinbase.