Closing Our Buy and Sell Bitcoin* Feature
Digital asset management group NYDIG has decided to discontinue services that allow our members to buy, sell, and access bitcoin when logged into digital banking. As a result, we'll be deactivating our Buy and Sell Bitcoin feature and closing all Visions NYDIG accounts. The closing process has begun and should be completed by the end of September, 2023. Funds will then be liquidated and funds should be disbursed to your Visions account within five business days of closing.
NYDIG "Wind Down" FAQ
If you're enrolled in Buy and Sell Bitcoin, here's what you'll need to know:
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.
When can I sell my bitcoin?
There are generally no restrictions on when you can sell your bitcoin in digital banking, from now until September 28th, 2023. The proceeds from your sale will be sent to Visions, and we will credit the proceeds to your linked account.
Are there fees when I sell my bitcoin?
No. There will be no fees associated with the selling of bitcoin during this closure period.
Where does the money go when I sell my bitcoin?
When you sell your bitcoin, NYDIG transfers the proceeds of the sale to Visions. We then credit those funds to your linked account.
How long does it take to receive money after selling bitcoin from my NYDIG account?
Typically, your funds should deposit to your Visions account in one or two business days. Though, in rare cases, it could take up to five business days.
How/when will my NYDIG account close?
As of July 31st, your NYDIG account will be restricted to "Sell Only". At this time, you are being asked to sell all of your bitcoin in digital banking before September 28th, 2023. Some time after 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 by September 28th, then NYDIG will sell the bitcoin automatically at the CME CF Bitcoin Reference Rate on the following day, September 29th. Proceeds from the sale of your bitcoin will be transferred to Visions within five business days after the sale of your bitcoin. At that time, your NYDIG account will close automatically.
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.
Does NYDIG send funds directly to my linked account?
When a sell order is executed, NYDIG transfers funds to Visions based on the price of bitcoin at the time the financial provider submits the order. You will receive the transaction proceeds after Visions credits those funds to your linked account.
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 Visions submits the order, typically related to the price of bitcoin on large US 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.
Do I have to pay taxes when I sell bitcoin?
You may have tax liability that arises from sell orders. Speak with a licensed tax professional 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.
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. Speak with a licensed tax professional 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.
How is my cost basis calculated when I sell bitcoin?
NYDIG uses "first in, first out" (FIFO) basis for Form 1099 tax reporting, meaning that 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.
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.
Where can I learn more about digital asset-related taxes?
Please speak to your tax advisor to learn more about taxes as they relate to digital assets, earnings, and sales.
*Bitcoin execution and custody services are provided by NYDIG Execution LLC (“NYDIG”). NYDIG is authorized by the New York State Department of Financial Services to engage in virtual currency business activity. To receive bitcoin services you must open an account with NYDIG in which your bitcoin will be held (the “NYDIG Account”). Please refer to NYDIG’s Terms and Conditions for more information, including applicable eligibility criteria. Bitcoin balances in your NYDIG Account are not insured by the National Credit Union Share Insurance Fund (NCUSIF), the Securities Investor Protection Corporation (SIPC), or any other public or private insurer. NYDIG does not make any recommendations regarding buying or selling bitcoin. There are risks associated with bitcoin trading, including possible loss of value. Please see the Terms and Conditions located within the Bitcoin service of digital banking for further details.
Bitcoin is not an obligation of nor guaranteed by Visions Federal Credit Union. Bitcoin and cryptocurrencies are or may be heavily speculative and volatile, may have associated fees, may not allow member recourse, and are being offered by a third party. Bitcoin purchasing fees apply. Offered through Visions’ digital banking services only. Bitcoin purchases are not federally insured by NCUA.
FAQ above is based on information provided by NYDIG.