Crypto

Bitcoin and other cryptocurrencies promise financial freedom: decentralised, censorship-resistant, impossible to confiscate. That is true, in theory. In practice, most crypto holders make mistakes that leave them exposed.

And the state is not asleep. With MiCA, the EU introduced the world's first comprehensive crypto regulation. Exchanges are licensed and supervised. Transactions are monitored. The anonymity of early Bitcoin is history.

The risks in detail

State regulation and bans

China has banned crypto, more than once. India has tried. The EU regulates it ever more tightly. Exchanges operating in the EU must carry out KYC (Know Your Customer): every transaction is tied to your identity. Anyone who believes crypto is anonymous is mistaken.

In an extreme case, the state can force exchanges to freeze accounts or hand over holdings, as happened during the Canadian truckers' protests in 2022, when the government had the bank accounts and crypto wallets of protesters frozen.

Third-party risk and exchange hacks

Crypto on an exchange is not your crypto. It is a claim against the exchange. If the exchange is hacked, goes bust or is shut down by a regulator, as with Mt. Gox, FTX and Celsius, you lose everything. "Not your keys, not your coins" is not a theory. It is reality.

Physical security and extortion

Known crypto holders are increasingly the target of physical attacks. Criminals know that anyone with enough crypto can be pressured into unlocking the wallet. There are documented cases of kidnapping and extortion against crypto holders. Discretion is essential.

Tax records and reporting duties

In the UK, crypto gains fall under capital gains tax whenever you dispose of tokens: when you sell them, swap them for another token, spend them or give them away. There is no holding period after which a gain becomes tax-free. And since 1 January 2026, under the Cryptoasset Reporting Framework, crypto service providers must collect data on their UK users and their transactions and report it to HMRC, for the first time by 31 May 2027. The tax record of crypto is becoming ever more complete.

What you can do

Self-custody: your keys, your crypto

The single most important step: take your crypto off the exchanges and keep it yourself in a hardware wallet. Ledger, Trezor, Coldcard: these devices keep your private keys offline and therefore out of reach of hackers and regulators.

Jurisdiction and tax planning

Anyone who moves their residence to a country with favourable crypto taxation, Portugal (tax-free until 2023), the UAE (no capital gains tax), El Salvador (Bitcoin as legal tender), can realise considerable tax advantages. We advise you on the right choice of jurisdiction.

Discretion and OpSec

Do not talk about your crypto holdings in public. Use different wallets for different purposes. Use privacy coins or mixing services for sensitive transactions, as far as they are legal. Your physical safety depends on nobody knowing how much you hold.