General FAQs
Bitcoin services are provided to you solely by NYDIG Execution LLC (“NYDIG”) upon opening an account with NYDIG. Bitcoin trading involves risks, including possible loss of value. Not insured by the NCUA or SIPC. See Terms at sign up for detail, including eligibility, risks and licenses.
1. Why is my NYDIG account being closed out?
NYDIG has made the decision to discontinue offering the bitcoin service and your NYDIG bitcoin account is being closed as a result.
2. When can I sell my bitcoin?
There are generally no restrictions on when you can sell your bitcoin. The proceeds from that sale will be sent to your financial provider, and the financial provider will credit the proceeds to your linked account.
3. Are there fees when I sell my bitcoin?
No. There will be no fees associated with the selling of bitcoin during this closure period.
4. Where does the money go when I sell my bitcoin?
When you sell your bitcoin, NYDIG will transfer the proceeds of the sale to your financial provider. Your financial provider will credit those funds to your linked account.
5. How long does it take to receive money after selling bitcoin from my NYDIG account?
Typically no more than 1-2 business days. Though, in rare cases, it could take up to five (5) business days to receive proceeds into your linked account.
6. How/when will my NYDIG account close?
You will be given 60 days to sell your bitcoin. Effective 7/31/2023 once your NYDIG bitcoin balance is brought to a $0 balance, your NYDIG bitcoin account will automatically close. If your NYDIG account is not brought to a $0 balance at the end of the 60 days NYDIG will sell the bitcoin in your account for you at the CME CF Bitcoin Reference Rate as of 4 pm London time on the following day. Proceeds from the sale of the bitcoin will be transferred to your financial institution account within 5 days after the sale of your bitcoin. At this time your NYDIG account will close automatically.
7. Can I withdraw bitcoin from my NYDIG account?
No. NYDIG does not allow transfers of bitcoin to external bitcoin wallets . The only action you may take with respect to your bitcoin is to initiate a sell order.
8. Does NYDIG send funds directly to my linked account?
When a sell order is executed, NYDIG transfers cash to your financial provider based on the price of bitcoin at the time the financial provider submits the order. You will not receive the transaction proceeds associated with the sell order until your financial provider credits such proceeds to your linked account.
9. How are prices of bitcoin determined for sell orders during the 60 day wind-down period?
The Price is based on (i) what NYDIG believes is the market price of bitcoin, at the time the financial provider submits the order, which is typically related to the price of bitcoin on large United States exchanges, plus (ii) a Spread. The Price may be different from any price an end user may see on any bitcoin exchange or trading venue. The Spread may differ based on volatility, the amount of time the specific Price is available to trade, and the volume of bitcoin that an end user is attempting to sell, among other factors. NYDIG will not separately calculate or disclose the Spread earned on each Transaction.
10. How do I report taxes on bitcoin sales?
If you sell any bitcoin from your account, you will receive IRS Forms 1099 by mail, email, or by secure message, and NYDIG will report Form 1099 filings to the IRS. Any Form 1099s you receive from NYDIG only cover bitcoin sale transactions. It is your responsibility to determine whether, and to what extent, you have tax liability resulting from any sell orders, and to report and remit the correct amounts of taxes to the appropriate tax authorities. Please consult a tax advisor with any additional questions related to your tax obligations.
11. Do I have to pay taxes when I sell bitcoin?
You may have tax liability that arises from sell orders. It is your responsibility to determine whether, and to what extent, you have tax liability and to report and remit the correct amount of taxes to the appropriate tax authorities.
12. How is my cost basis calculated when I sell bitcoin?
NYDIG uses the first in, first out (FIFO) basis for Form 1099 tax reporting, meaning that assets are deemed to have been disposed of in the order in which they were acquired (i.e., the oldest assets are sold first). FIFO is the default method specified by the IRS for tax reporting. Please consult with a tax advisor for assistance in using NYDIG’s Form 1099 to complete IRS Form 8949.
13. Will NYDIG provide me with any documentation for tax reporting?
If you sell any bitcoin from your NYDIG bitcoin account, you will receive IRS forms 1099-B from NYDIG, and NYDIG will also report the information to the IRS. Any form 1099-B that you receive from NYDIG will only cover the bitcoin sale transactions.
14. Where can I learn more about digital asset-related taxes?
Please speak to your tax advisor to learn more about digital asset-related taxes.