Bitcoin IRAs (individual retirement accounts) seemed like a simple concept to investors, especially those used to other types of retirement plans. So simple in fact that in March 2021, when bitcoin surged above $50,000, the eponymous Bitcoin IRA company boasted that it had reached 100,000 customers.
And it quickly expanded beyond its bitcoin namesake. At the end of the year, it also allowed customers to buy ether, litecoin, bitcoin cash, stellar lumens, zcash, and even non-crypto assets like gold.
Indeed, today, Bitcoin IRA boasts that clients can invest in over 60 crypto assets and various non-crypto assets.
However, despite the rapid growth and big claims made, there is some signs that all is not well for Bitcoin IRA.
Its website’s “Earn” page, which promised investors up to 6% interest on silver and crypto from their retirement fund, is also no longer active. Not only that, it appears to have removed a number of eyebrow-raising disclosures.
This is in addition to the fact that Bitcoin IRA is embroiled in a number of legal battles initiated by customers alleging deceptive practices. It has also received complaints about poor customer service and even missing funds..
Bitcoin IRA and Kingdom Trust battle it out in court
In August 2019, Bitcoin IRA and its subsidiary, Digital IRA, entered into a legal battle with custodian and trust company, Kingdom Trust. Bitcoin IRA alleged that Kingdom Trust was preventing customers from transferring their retirement accounts to its own custodian, BitGo.
For its part, Kingdom Trust had filed a lawsuit against Digital IRA and Bitcoin IRA a few days earlier. In Suit, Kingdom Trust alleged Bitcoin IRA stole trade secrets owned by him and conspired to deceive his clients.
Kingdom Trust had planned to merge with BitGo in January 2018. The lawsuit alleges that it shared information and secrets, including customer lists and internal policies and procedures with BitGo as part of its preparations for the merger. However, BitGo terminated the deal in May 2018.
A year later, in May 2019, BitGo Trust entered into a Third-Party Administrator Commitment Agreement with Digital IRA. Kingdom Trust alleges that BitGo shared the confidential information with Digital IRA as part of a conspiracy to lure its customers.
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Customer complaints are piling up
On June 22 of this year, a Bitcoin IRA client complained about a 1% commission for making an in-kind asset transfer to another IRA company. Bitcoin IRA claimed to have disclosed this 1% fee in an email. However, the client said it was a marketing email that customers could opt out of, which made it legally useless. In the end, the client received a refund of the costs.
On November 22, 2021, another client alleged that Bitcoin IRA refused to process his request to transfer assets to another IRA company. The client requested the transfer in September 2021 and had a teleconference with Bitcoin IRA on October 15, 2021.
Bitcoin IRA continued to spin the client, claiming the transfer was a complicated process or required approval from various executives. After filing a complaint with the Better Business Bureau (BBB), Bitcoin IRA transferred the funds as requested.
Bitcoin IRA has a two-star rating from four reviews officially filed with the BBB. Its negative reviews complained of lost funds, mishandling of documentation, or deceptive marketing of an alleged “free” account that did not exist.
Bitcoin IRAs sound like a good idea in principle. People with a retirement account can add digital assets to it. However, it’s not just Bitcoin and as a business Bitcoin IRA doesn’t look all that impressive when we take into account allegations of theft of confidential information from other companies, deceptive business practices and mistreatment of customers.
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