Ask Larry

Can I Invest Benefits Belonging To A Person For Whom I'm Acting As Representative Payee In Crytocurrency?

So in reading your article from last year on crypto currency’ I am confused. I act as a payee for a SSDI receiver. It is my understanding that monies spent must be reported to Soc Sec once a year. Their publications state that investments should be in secured places such as a bank acct or Savings Bonds. Crypto currency doesn’t seem to fall under this category. Yet with articles that state investing in crypto has no effect on monies received from ssdi, the disabled person is relentless in wanting more of his money to buy crypto. His monthly earnings aren’t even enough to meet his monthly living expenses. Yet now I have to be responsible to keep him from losing money he can’t afford to lose, in the crypto market. The public’s documentation from Soc Sec doesn’t seem to align with this theory. With someone who has a mental disability it is very difficult to manage their money responsibly and endure their needling to spend their money.

Hi. This is what I know. Social Security only appoints a representative payee to handle someone else's Social Security benefits if the person who's eligible for benefits has been determined to be incapable of managing their benefits in their own best interest. Any benefits not required for the incapable person current needs are required to be conserved for their future needs.

Obviously, the point of appointing a payee to handle someone's Social Security benefits is to prevent the incapable person from squandering their benefits. The preferred way of saving any conserved funds is through U.S. Savings Bonds or an interest-paying bank account that’s insured under either federal or state law.

However, representative payees are allowed to invest conserved benefits in other investments as long as those investments are in accordance with State laws governing the investment of trust estates by trustees ( A description of each State's laws regarding the investment of conserved funds can be found in the following section of Social Security's operations manual: As far as I know, cryptocurrency is not specifically addressed in any of the State summaries.

You might want to call a Social Security office in your area to see if they've received any updated information regarding the investment of conserved funds in cryptocurrency. Or, you could try locating someone who has expertise in your state's laws governing the investment of trust estates by trustees.

Best, Jerry

Jun 18 2022 - 1:47pm
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