Block data
- The SEC lists annual asset-based fees, transaction fees, asset transfer fees and account setup and closing fees as costs to ask custodians about.
- Your basis in virtual currency includes fees, commissions and other acquisition costs, according to the IRS.
- Moving crypto between your own wallets is not a taxable transaction unless you pay a transaction fee with digital assets, the IRS says.
On a crypto platform, the price you see is rarely the whole cost. Fees appear at deposit, at the trade, when you move coins out and sometimes just for holding them. None of them is large on its own, but on frequent small trades they add up. This guide lists the categories so you can compare platforms on the full cost; it does not quote any platform’s rates, which change often.
The four fee types the SEC names
The SEC’s investor bulletin on crypto custody tells investors to ask any custodian about these costs:
| Fee type | What it is, in the SEC’s words | When it hits |
|---|---|---|
| Annual asset-based fee | An annual fee based on the value of your crypto assets | While you hold |
| Transaction fee | The cost to spend or trade your crypto assets | Each trade or purchase |
| Asset transfer fee | The cost to move your crypto assets outside of the custodian | Withdrawals to another wallet or platform |
| Account fees | Fees to set up and close the account | Opening and closing |
Ask for all four in writing before you deposit. A platform with low trading fees can still be expensive if it charges heavily to withdraw, and a fee to close the account is worth knowing about before you need to leave.
Think of the transfer fee as part of your exit price. The FTC points out that if an online exchange platform goes out of business, no one may be able to step in to help you recover your funds, so the cost and speed of moving assets off a platform matter as much as the cost of trading on it. The CFTC also advises researching a platform’s legitimacy carefully before providing card details, wiring money or sharing sensitive personal information.
Wallet and network costs
Holding crypto yourself has its own costs. The SEC notes that physical devices for cold wallets typically cost money to buy, while hot wallets may initially be free, but making transactions using either kind typically involves fees. Learn those costs before choosing a wallet or sending a transaction. Wallet choices are compared in Hot vs Cold Crypto Wallets, and Who Holds Your Keys.
The cost hidden in the price
Some of what you pay never shows up as a line called fee. The SEC explains that a market order executes at or near the current ask price when you buy and the bid price when you sell, and that the last-traded price is not necessarily what you will get. The gap between buying and selling prices is a cost of every round trip. The CFTC also warns that some crypto platforms sell from their own accounts, which can put customers at an unfair disadvantage. Using limit orders keeps control of the price; see Market Orders vs Limit Orders: Choosing How Your Trade Executes.
Fees and your taxes
Fees matter at tax time as well as at trade time. The IRS says your basis in virtual currency you buy with dollars is the amount you spent, including fees, commissions and other acquisition costs. A higher basis means a smaller taxable gain, or a larger loss, when you sell.
One fee can create a taxable event by itself. The IRS says transferring digital assets between wallets or accounts you own is not a digital asset transaction, unless you pay the transaction fee with digital assets. Paying a network fee in crypto turns the transfer into a digital asset transaction, so it belongs in your records. More in Crypto Taxes in the US: What Is Taxable and How Much.
Tip: Keep a simple log for every trade and transfer: date, asset, amount, dollar value and the fee paid, and in what currency. The IRS requires records sufficient to support your return, and your platform’s statements may not cover transfers between wallets.
Fees in scams
Fees are also a favorite tool of fraudsters. The FTC describes fake investment sites where you cannot withdraw your money at all, or only if you pay high fees. The CFTC describes romance scams in which victims are locked out and told to pay more money, commonly in fake fees or taxes, before they can get anything back. A demand for an upfront fee to release your own funds is a classic warning sign; see Crypto Scams to Avoid: The Patterns Regulators See Most.
How to compare platforms on cost
- List the four SEC fee types for each platform.
- Check the withdrawal fee for the assets you plan to hold, not just bitcoin.
- Price a round trip: buy and sell the same small amount and compare dollars in and dollars out.
- Count how often you expect to trade; frequent trading multiplies transaction fees.
- Record every fee: the IRS counts acquisition fees as part of your basis.
Cost is one item on the list in Choosing a Crypto Exchange: Questions to Ask Before You Deposit. It should come after registration, custody and withdrawal reliability, not before.