Crypto regulations can feel like searching for the middle of a maze—but that maze has moving walls and a thousand contradicting maps. 

For years, crypto has sprinted ahead of lawmakers, creating an unpredictable environment for investors. As we look into 2025, some experts believe we’ll finally see regulatory clarity, but for now, it’s still up in the air. Even though President Donald Trump might have shown support for crypto during his campaign, it could take years before new laws reach the everyday person. 

This is even true with the executive actions taken his first few days in office. 

Like with any other asset, it’s wise to have a plan to protect your cryptocurrency based on the current laws and regulations. And, of course, your plan should be flexible enough to adapt if things change.

While the future might feel uncertain, there are strategies you can use to safeguard your assets and your estate. Whether your portfolio includes Bitcoin, Ethereum, Solana, Dogecoin, or all of the above, let’s discuss key considerations for the next few years.

Changes coming for crypto in 2025

There are plenty of predictions about where crypto is headed in 2025 from influencers, finance analysts, political pundits, and talking heads on the internet. As it goes in the marketplace of opinions, some predictions will be correct, but many will be wrong. 

So, which forecasts are more reliable, and how can you plan for asset protection no matter which way the regulatory winds blow?

Tax changes in cryptocurrency

Starting in 2025, the U.S. Treasury and IRS will implement new tax regulations for cryptocurrency assets and transactions. 

Individuals who make more than $600 a year from NFT sales must report their gains. Brokers such as Coinbase and Kraken will now provide 1099 forms to the IRS. This may simplify filing taxes for individuals, but they may encounter additional restrictions and increased transaction monitoring. 

Most of these regulations became enforceable at the beginning of 2025. If you have questions about protecting your assets and investment strategies with changing government processes, contact an asset protection attorney with experience safeguarding cryptocurrency assets. 

Upcoming regulations—or will it be deregulations?

The 2017 Tax Cuts and Jobs Act (TCJA) is due to sunset at the end of 2025, which is significant for any asset type, including cryptocurrency. 

The TCJA essentially doubled the threshold for assets to incur federal gift and estate taxes, allowing individuals to pass on more wealth to their loved ones without the hefty 40% transfer tax. If the exemption resets, high-net-worth households will need to adjust their estate and gifting plans to minimize tax burdens.

While there’s a chance that Congress will extend the TCJA, it’s certainly not a guarantee. Those interested in strengthening their asset protection strategy should work with experienced estate attorneys, such as the attorneys at the Law Offices of Shann M. Chaudhry, ESQ., to protect any cryptocurrency assets.

Is crypto deregulation on the horizon?

Predictions for crypto legislation in the coming years vary—sometimes wildly. President Donald Trump ran a pro-crypto campaign, promising to maintain the current level of U.S. bitcoin holdings, create a bitcoin and crypto presidential advisory council, and support bitcoin mining in the U.S.

While these initiatives hint at support for greater cryptocurrency adoption, they don’t indicate how these changes will impact individual crypto holders. In fact, depending on the way the winds blow, they could even lead to tighter regulations.

At the moment, speculation on crypto deregulation is just that—speculative.

What does this mean for your crypto assets?

For individuals’ crypto assets (and for many things in life), it’s usually a good idea to plan for the worst and hope for the best. If you properly plan your estate, you’ll be better able to protect your assets even if regulations increase.

Draft an estate plan with digital assets in mind

While general estate planning and asset protection best practices apply to cryptocurrency, additional steps may be necessary. 

Many crypto wallets are lost simply because beneficiaries don’t have the necessary information to access the digital assets inside a wallet. As such, it’s always a good idea to find an estate planning attorney you trust to help you develop (and execute) a clear plan for these pieces. 

Keep records of all transactions

Keep a detailed log of your crypto transactions, including:

• When you acquired each asset
• The value of the asset on the purchase date
• How much you paid for the asset
• When you sold any assets
• If you earned capital gains on any crypto sales

This is beneficial for both estate planning and annual tax reporting. 

Write a detailed letter of instruction

Draft a detailed letter to help your beneficiaries or executors access your digital assets. This document should provide a comprehensive list of assets, their whereabouts, contact information, and wishes. 

(It can be more complicated than that, so enlist your attorney to help you cover all your bases.)

Consider lifetime giving and gift exclusions

With the TCJA expected to sunset at the end of 2025, now is the ideal time to set up gift strategies or trusts to protect your assets against higher estate transfer taxes. 

There are several strategies to minimize tax burdens via gifting or charitable lifetime giving. Remember that some asset holdings may impact Medicaid eligibility for you or your beneficiaries, so it’s important to understand the pros and cons of each asset protection strategy. 

Implement asset protection trusts or move crypto assets to an LLC

Placing crypto assets in a trust or LLC can help shield assets from creditors and bypass probate courts, providing a smoother transition. 

While trusts are a great way to protect wealth, they don’t cover all types of assets. Using trusts alongside a last will and testament can help account for all assets in your estate and ensure your beneficiaries are shielded from cumbersome processes and fees. 

Advanced asset protection strategies for crypto

Cryptocurrency investors with significant holdings must consider advanced strategies to mitigate tax burdens, enhance asset protection, and facilitate smooth wealth transfer.

Using complex tax transactions in crypto planning

For high-net-worth individuals, structuring cryptocurrency sales with advanced tools like Intentionally Defective Grantor Trusts (IDGTs) offers unique tax advantages. By transferring cryptocurrency to an IDGT, you can sell the assets to the trust at a discounted value while freezing the value of your estate for tax purposes.

Income generated from staking cryptocurrency—where digital assets earn rewards for validating transactions on the blockchain—can further enhance this strategy. For example:

• Stake returns: Earnings from staking can be used to fund a promissory note between the trust and the grantor, allowing for greater liquidity while maintaining tax benefits.
• Leveraging rains: Selling staking returns to the trust effectively transfers future appreciation to beneficiaries, minimizing exposure to estate taxes.

This approach requires precision and expertise in trust planning, but it can provide significant savings for crypto investors.

Incorporating GRATs, CRATs, and CLATs into crypto strategies

Beyond IDGTs, advanced estate planning tools such as Grantor Retained Annuity Trusts (GRATs), Charitable Remainder Annuity Trusts (CRATs), and Charitable Lead Annuity Trusts (CLATs) offer tailored options for protecting and growing cryptocurrency assets:

• GRATs: These trusts allow you to transfer crypto assets to heirs while avoiding gift taxes. By structuring the GRAT properly, any appreciation of the cryptocurrency above a fixed return rate passes to beneficiaries tax-free.
• CRATs: Donating cryptocurrency to a CRAT can generate lifetime income for you or your beneficiaries while providing a charitable deduction. At the trust’s termination, the remaining assets go to a designated charity.
• CLATs: Similar to CRATs, CLATs allow you to support charities while passing remaining assets to heirs tax-efficiently. These trusts can be a great option for crypto holders with a strong philanthropic focus.

Implementing these strategies requires careful planning and accurate valuations of cryptocurrency holdings, but the potential benefits in tax savings and wealth preservation are invaluable.

Keep an eye on regulatory changes

Cryptocurrency regulations are rapidly evolving. It’s a volatile market in more ways than one, and anyone who claims that they know what the future holds for crypto…well, they must have one heck of a crystal ball. 

To protect your wealth and support efficient estate plans, you can work with an estate planning attorney to build a cryptocurrency asset strategy that protects against current regulations, adapts to future changes, and complements your other estate planning needs. 

An experienced cryptocurrency asset protection attorney can help

Cryptocurrency is a relatively new asset class, which makes it crucial to work with attorneys experienced in cryptocurrency asset protection. Whether you want to ensure a smooth estate transfer or protect your assets now, a trusted attorney can help you navigate uncharted asset territory in 2025 and beyond. 

Contact the Law Offices of Shann M. Chaudhry, ESQ., today to schedule a consultation. Let’s discuss how you can protect your cryptocurrency assets for years to come.