Cashing Out Thousands of Bitcoin

[Crypto Bull]

How would you go about cashing out very large sums of Bitcoin, or other cryptocurrency?

A hypothetical example:

You were fortunate to purchase five thousand Bitcoin, when it was only pennies a coin, and it's now worth a whopping $130,000,000. This is now sitting in cold storage in your digital wallet, and you want to cash out 100 million usd.

1) Are Coinbase and Gemini your only convenient options? Will they be able to cash out such a large sum, and send the proceeds to your financial institutions without issues?  

2) FDIC insurance only covers up to 250k per bank account. So, you would need more than four hundred accounts in order to cover all 100 million dollars. Is there a better way? Can you just send all 100 million directly to your Vanguard brokerage account? How do the ultra-wealthy do it??

3) What would happen if you suddenly sent a hundred million dollars to several banks/financial institutions? Would the IRS be immediately notified? Would your accounts get frozen? How do you avoid this?


No snarky answers, please. The above are only hypothetical examples. I don't own 5000 Bitcoin. Not even remotely close.

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[jeraldskie11]

The withdrawal amount is too big, I don't think there are banks or any local exchanges that can make you convert in one time with no worries.

That amount might be questionable to any exchanges if you're just a new user. So the best thing to do is to withdraw a couple amount gradually and use Bitcoin mixer to make sure that your address is clean and not connected to any suspicious address.

[panganib999]

First off, the moment you cashed out 100 million bucks it's not going to be 100 million dollars anymore, that's a massive a mount of money that would sway the hearts of the holders in this industry, there's no doubt people will see that and think it's the end of the world lol. Plus there's no bank nor financial institution out there that would want to facilitate your transfer or saving, that's a huge amount of money and your best bet is with a swiss bank if you don't want to face tax consequences, but we all know how that works.

I say if you want to withdraw your money really, withdraw it slowly and with different accounts, don't do it all at once. Give the market time to recover from your sales.

[jossiel]

If I own that much, I'd probably register to as many exchanges as I can just to cash them out. But I'll do it with small amounts until I ran out of it if that's the plan to sell all of it.

But first, look if there's an OTC market where you can go. It's for sure going to ask you some important matters and will certainly ask for KYC. But do you have the choice?

You want to sell it and it's like you've got few options to do that. Although you can also check P2P for it, so that means like canvassing all potential markets and methods.

To avoid alert from the bank, don't do like a million a day or learn how much your bank allows not to flag you with your transactions.

[logfiles]

How about withdrawing it periodically and not just at once? That's what I would certainly do. Probably create a bunch of multiple accounts in different exchanges and banks with the help of my family and the drain up the stash with time.

3) What would happen if you suddenly sent a hundred million dollars to several banks/financial institutions? Would the IRS be immediately notified? Would your accounts get frozen? How do you avoid this?

IRS is as US problem. There is a whole world out there

You want to sell it and it's like you've got few options to do that. Although you can also check P2P for it, so that means like canvassing all potential markets and methods.

Nah, there is not enough liquidity when it comes to p2p platforms.

[hatshepsut93]

Would the IRS be immediately notified?

yes

Would your accounts get frozen? How do you avoid this?

If this transaction is not typical for your account, it will most likely be an instant freeze. But if your bank knows you're a billionaire Bitcoin holder, there shouldn't be problems. Large transactions take time to process, and your bank will definitely ask you about where those money came from.

How do you avoid this?

You can't just put 100M into the bank system without playing by the bank system's rules.

[PX-Z]

Why would someone will cash out all their bitcoin on this current situation, or cashing out one time if that's what you mean. You don't need to cash it out once, when you can do it in multiple times which may give someone an advantage, maybe price will go up later on, then a little hold on if it decreases.

[Accardo]

The wealthy bitcoin holders don't have any problem converting their funds to fiat. This is where p2p transaction comes to play. How would you use exchanges and banks with multiple limitations to run such transactions? Many bitcoin whales use their bitcoin to pay for houses and cars, without passing through any third party like the banks. No need keeping $100m in the bank, when it can stay safely in your wallet. If you need to purchase properties, paying directly with bitcoin is the best option. Then withdraw gradually the rest of the coin to your bank account for minor expenses. What matter is keeping your coin safe from being hacked. I won't encourage using bank, because of the stress; too many questions, like the source of the money. Whenever, I see huge transaction from bitcoin whales, there is always a story of the owner buying a Lamborghini or house with the coin. Agents or sellers of such properties can accept huge amount of bitcoin.

[KennyR]

This is going to be really tough, because when the transaction limits were seen high automatically there arises question on the transaction. With my bank I was investigated when my account started to handle transactions in thousands of dollars. Earlier I hadn't used to it. We can expect similar situation with majority of the banks. I'm not sure of it, but to convert the convert the black money into pure money corporate firms use shell companies registered and bring the money through them. Maybe starting such companies and investing on them and bringing it into account seems to be the better choice.

[philipma1957]

How would you go about cashing out very large sums of Bitcoin, or other cryptocurrency?

A hypothetical example:

You were fortunate to purchase five thousand Bitcoin, when it was only pennies a coin, and it's now worth a whopping $130,000,000. This is now sitting in cold storage in your digital wallet, and you want to cash out 100 million usd.

1) Are Coinbase and Gemini your only convenient options? Will they be able to cash out such a large sum, and send the proceeds to your financial institutions without issues?  

2) FDIC insurance only covers up to 250k per bank account. So, you would need more than four hundred accounts in order to cover all 100 million dollars. Is there a better way? Can you just send all 100 million directly to your Vanguard brokerage account? How do the ultra-wealthy do it??

3) What would happen if you suddenly sent a hundred million dollars to several banks/financial institutions? Would the IRS be immediately notified? Would your accounts get frozen? How do you avoid this?


No snarky answers, please. The above are only hypothetical examples. I don't own 5000 Bitcoin. Not even remotely close.

It is easy enough with multiple steps.

Assuming you are USA based and your cost was next to nothing.

Consult a tax lawyer and a tax accountant.
Move to a no tax state.
Step 1 Move some coin not much 3-5 coins to coinbase.
Step 2 sell the coin.
Step 3 move the 100k to a brokerage that sells fed bonds buy some. that is for you JJG
Step 4 Move some coin more say 6-10
Step 5 Sell the coin
Step 6 Move 200k to your brokerage buy some bonds.

Repeat over and over slowing increasing the moves.
Pay a shit ton of tax ahead of time.

Pay attention to your tax advisors.

[laurenB7742]

The wealthy bitcoin holders don't have any problem converting their funds to fiat. This is where p2p transaction comes to play. How would you use exchanges and banks with multiple limitations to run such transactions? Many bitcoin whales use their bitcoin to pay for houses and cars, without passing through any third party like the banks. No need keeping $100m in the bank, when it can stay safely in your wallet. If you need to purchase properties, paying directly with bitcoin is the best option. Then withdraw gradually the rest of the coin to your bank account for minor expenses. What matter is keeping your coin safe from being hacked. I won't encourage using bank, because of the stress; too many questions, like the source of the money. Whenever, I see huge transaction from bitcoin whales, there is always a story of the owner buying a Lamborghini or house with the coin. Agents or sellers of such properties can accept huge amount of bitcoin.

I think it depends on the country, if in my country, you won't find any real estate brokers accepting payments in bitcoin or cryptocurrency, or buying cars or houses...what they want to receive is cash or bank transfer.

Regarding cashing out large amounts of money from cryptocurrency, I think P2P trading is the best and that's what big investors in my country are doing. But in general, if the amount is too large, whether we use a bank or use P2P, there are potential risks. In that situation you should only withdraw money gradually and not withdraw money a few times.

[Afnan_faizah]

honestly, i will avoid to do that. I think it will be better if I do it little by little. even trading volume in my local exchange is only 16 BTC, it seems that it is not so profitable if I do it at once. I really feel that government really push people to the interest based economy, if we have a lot of money which is not debt the government will push us to pay high rate of taxes. I think it will be better if I avoid something that will catch their attention

[tbct_mt2]

They can use Bitcoin OTC Markets. Whales and Bitcoin miners have their favorite market is OTC because with big capital, they don't want to create impacts on market price when they don't want to manipulate the market. With OTC trading, they can do their trade privately and without market price impacts.

Over the Counter (OTC) Cryptocurrency Trading - Explained in Details.
Crypto Traders Flock to OTC Markets as Exchange Liquidity Dries Up Amid Regulatory Clampdown.

[Crypto Bull]

This is going to be really tough, because when the transaction limits were seen high automatically there arises question on the transaction. With my bank I was investigated when my account started to handle transactions in thousands of dollars. Earlier I hadn't used to it. We can expect similar situation with majority of the banks. I'm not sure of it, but to convert the convert the black money into pure money corporate firms use shell companies registered and bring the money through them. Maybe starting such companies and investing on them and bringing it into account seems to be the better choice.

I wouldn't even be looking to evade taxes. I would just want to transfer my Bitcoin (ultimately) to my brokerage accounts, and invest in the portfolio that I hold now (90% stocks, 10% bonds). I will pay whatever tax I owe at the end of the year, with some cash that I would deposit directly into my bank accounts.

[joniboini]

1. I don't think they are available in my region. That being said, liquidating everything at once is impossible regardless of what exchange you use. The highest withdrawal amount that I can do at the moment is around $15k per day without submitting any documents. Probably higher if I want to get into trouble with the government.
2. Not sure how the ultra-wealthy do it, but if they live in my country there is no way they can cash out all at once as mentioned above. I doubt they want to sell them all at once in the first place.
3. That is likely even though my government tax agent is not as 'evil' as the IRS. I'm pretty sure most of wealthy users can get away after paying some tax and providing some documents though. The only way to avoid it is simply don't do it. You're just exposing yourself for no reason.

[Ale88]

How would you go about cashing out very large sums of Bitcoin, or other cryptocurrency?

A hypothetical example:

You were fortunate to purchase five thousand Bitcoin, when it was only pennies a coin, and it's now worth a whopping $130,000,000. This is now sitting in cold storage in your digital wallet, and you want to cash out 100 million usd.

1) Are Coinbase and Gemini your only convenient options? Will they be able to cash out such a large sum, and send the proceeds to your financial institutions without issues?  

2) FDIC insurance only covers up to 250k per bank account. So, you would need more than four hundred accounts in order to cover all 100 million dollars. Is there a better way? Can you just send all 100 million directly to your Vanguard brokerage account? How do the ultra-wealthy do it??

3) What would happen if you suddenly sent a hundred million dollars to several banks/financial institutions? Would the IRS be immediately notified? Would your accounts get frozen? How do you avoid this?


No snarky answers, please. The above are only hypothetical examples. I don't own 5000 Bitcoin. Not even remotely close.

First of all I would move to a country with no capital gain taxes, that's the very first thing to do. Regarding the cash out, you need to talk with the bank first to make sure they are ok receiving big money coming from cryptos, some banks just don't like that and may even refuse the transaction and shut down your account. Other thing, if you really plan to sell 5k BTC at once probably you need to get in touch with the exchange and check how OTC sales work.

[Crypto Bull]

you can also check P2P for it, so that means like canvassing all potential markets and methods.

What is P2P? I keep hearing this. I could do a Google search, but I'm lazy right now.

How would you go about cashing out very large sums of Bitcoin, or other cryptocurrency?

A hypothetical example:

You were fortunate to purchase five thousand Bitcoin, when it was only pennies a coin, and it's now worth a whopping $130,000,000. This is now sitting in cold storage in your digital wallet, and you want to cash out 100 million usd.

1) Are Coinbase and Gemini your only convenient options? Will they be able to cash out such a large sum, and send the proceeds to your financial institutions without issues?  

2) FDIC insurance only covers up to 250k per bank account. So, you would need more than four hundred accounts in order to cover all 100 million dollars. Is there a better way? Can you just send all 100 million directly to your Vanguard brokerage account? How do the ultra-wealthy do it??

3) What would happen if you suddenly sent a hundred million dollars to several banks/financial institutions? Would the IRS be immediately notified? Would your accounts get frozen? How do you avoid this?


No snarky answers, please. The above are only hypothetical examples. I don't own 5000 Bitcoin. Not even remotely close.

First of all I would move to a country with no capital gain taxes, that's the very first thing to do. Regarding the cash out, you need to talk with the bank first to make sure they are ok receiving big money coming from cryptos, some banks just don't like that and may even refuse the transaction and shut down your account. Other thing, if you really plan to sell 5k BTC at once probably you need to get in touch with the exchange and check how OTC sales work.

Yeah, I'm not familiar with over-the-counter (OTC) sales at all.

To your point about moving to another country: This would be very problematic on multiple levels for me, one of which is that, thanks to the Communist, Obama, who managed to ram FACTA into law, it's very difficult for an American to open a bank account overseas, let alone deposit millions of dollars into one.

[xSkylarx]

That huge amount of money at the time you put it in a bank account will be frozen by the bank immediately subject to knowing why you have that money and also the tax on it. It is better to not cash it out one time but just cash it out gradually and into different accounts because it will not be easily identified by the banks. Another way is P2P but still not that much bitcoin as it is very huge.

[Crypto Bull]

The withdrawal amount is too big, I don't think there are banks or any local exchanges that can make you convert in one time with no worries.

That amount might be questionable to any exchanges if you're just a new user. So the best thing to do is to withdraw a couple amount gradually and use Bitcoin mixer to make sure that your address is clean and not connected to any suspicious address.

What is a Bitcoin mixer?

Why would someone will cash out all their bitcoin on this current situation, or cashing out one time if that's what you mean. You don't need to cash it out once, when you can do it in multiple times which may give someone an advantage, maybe price will go up later on, then a little hold on if it decreases.

You mean to treat my Bitcoin like stocks and bonds, which are only liquidated as needed? I thought about that, but I would be more concerned about managing risk by transferring BTC into relatively safer assets. That's the only reason I would want to transfer such a large sum. 30m can stay in BTC for diversification.

 

How would you go about cashing out very large sums of Bitcoin, or other cryptocurrency?

A hypothetical example:

You were fortunate to purchase five thousand Bitcoin, when it was only pennies a coin, and it's now worth a whopping $130,000,000. This is now sitting in cold storage in your digital wallet, and you want to cash out 100 million usd.

1) Are Coinbase and Gemini your only convenient options? Will they be able to cash out such a large sum, and send the proceeds to your financial institutions without issues?  

2) FDIC insurance only covers up to 250k per bank account. So, you would need more than four hundred accounts in order to cover all 100 million dollars. Is there a better way? Can you just send all 100 million directly to your Vanguard brokerage account? How do the ultra-wealthy do it??

3) What would happen if you suddenly sent a hundred million dollars to several banks/financial institutions? Would the IRS be immediately notified? Would your accounts get frozen? How do you avoid this?


No snarky answers, please. The above are only hypothetical examples. I don't own 5000 Bitcoin. Not even remotely close.

It is easy enough with multiple steps.

Assuming you are USA based and your cost was next to nothing.

Consult a tax lawyer and a tax accountant.
Move to a no tax state.
Step 1 Move some coin not much 3-5 coins to coinbase.
Step 2 sell the coin.
Step 3 move the 100k to a brokerage that sells fed bonds buy some. that is for you JJG
Step 4 Move some coin more say 6-10
Step 5 Sell the coin
Step 6 Move 200k to your brokerage buy some bonds.

Repeat over and over slowing increasing the moves.
Pay a shit ton of tax ahead of time.

Pay attention to your tax advisors.

Sounds good, but I would buy mostly stocks (90% stocks/10% bonds). With 100m, I would be able to afford to do that.

[Darker45]

I don't think there will be a centralized exchange that can give you convenience. They will surely take a closer look. Such transaction does not happen all the time, and since you're just an individual user and not a known institution, you'll probably have to produce certain documents. That's not going to be convenient at all. These are regulated platforms that are compliant with the policies on AML, CFT, and others.

I don't know how the ultra-wealthy do it, but for an ordinary Bitcoin pleb who only happened to buy Bitcoin at a much earlier time, it's surely not easy at all. Having banks and other traditional financial institutions involved would certainly give more headache.

If I'm in this situation, I'd rather not cash out a huge amount at once. I don't care if it takes me decades to cash out everything, but I guess that's the smoothest way for me.