// Answers
Crypto & fintech answers
One question, one page. 12 answers to the questions where being told the wrong thing costs real money — custody, fees, US tax, licensing and stablecoins.
Written by Zion Labs, the organisation — these pages carry no personal byline. Every factual claim on every page lists the source it stands on, with a note saying what that source is being cited for, so a claim can be checked rather than just read. Where an answer depends on rules that are still being written, the page says so instead of stating a verdict.
Each page carries a review date. When it passes, the page is re-verified against its sources or it breaks our build — a library like this is only worth reading if something forces it to stay current. Answers that are retired redirect; they are never quietly demoted while staying in the sitemap.
General information, not legal, tax or investment advice.
Custody & exchange safety
Who actually holds your assets, what a reserves report does and does not prove, and what your position is if the company holding them fails.
- Is proof of reserves the same as an audit? No. It is usually an agreed-upon-procedures engagement at one moment in time, with no audit opinion — and often no view of the liabilities side at all.
- Who legally owns crypto held in a custodial account? It depends on the customer agreement, not the balance you see. Some terms hold assets for you; others transfer title and leave you an unsecured creditor.
Fees & true cost
The difference between what a trade is quoted at and what it costs you — network fees, spreads, execution, and who sets which.
- Who sets crypto network fees? No single party does. Network fees come from competition for limited block space, and on Ethereum from a base fee the protocol recalculates every block.
- What is slippage in crypto trading? The gap between the price you expected and the price your order actually filled at — and the tolerance you set for it is something MEV bots can exploit.
Tax & reporting (US)
US federal treatment of digital assets, the forms that report it, and the rules that changed recently enough that most published answers are stale.
- What is Form 1099-DA? The US information return brokers use for digital asset sales. Gross proceeds are reported from 2025 transactions; cost basis is only added from 2026.
- Does the wash sale rule apply to crypto? Not to spot crypto under US law: §1091 covers stock and securities, and the IRS treats digital assets as property. Bills to change that keep appearing.
- Do I have to report crypto if I never sold? Two separate questions. Everyone answers the Form 1040 digital asset question; holding alone lets you check No, but receiving crypto does not.
Regulation & licensing
"Licensed" and "regulated" are used as synonyms for "safe". These answers set out what each registration actually covers, and what it leaves untouched.
- What does a crypto exchange licence actually cover? There is no single US licence to run a spot crypto exchange. Platforms hold a patchwork of AML registration and state licences — none of which insure you.
- What is MiCA authorisation? Approval under Regulation (EU) 2023/1114 to issue crypto tokens or provide crypto services in the EU, passportable across member states. In force since 2024.
- What is a money transmitter licence? A US state licence to receive money for transmission. It imposes capital, bonding and supervision requirements on the operator — it is not deposit insurance.
Stablecoins & yield
What sits behind a stablecoin, how that is verified, who holds a redemption right, and where an advertised yield is really generated.
- What backs a stablecoin? It depends on the issuer. "Backed 1:1" collapses three separate things: what the reserves are, how they are verified, and who holds a redemption right.
- Where does stablecoin yield come from? Not from the coin. US law bars permitted issuers from paying holders yield, so any advertised return comes from what a third party does with the coins.