// LIBRARY
The Library
One question, one page, 18 of them. Each opens with the answer, states a position rather than a definition, and names the source it stands on. Written in the shape an engine can lift whole.
This is the direct answer layer. Signal publishes what nobody has measured yet; the Library answers the questions buyers already ask every day, in the places 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 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.
- Is my crypto insured if the exchange fails? Almost certainly not. FDIC insurance covers bank deposits and SIPC covers customers of member brokerages. Neither one covers a token at an exchange.
- What happens to my crypto if the exchange goes bankrupt? Withdrawals stop at filing. Whether the assets are yours or the estate's turns on the terms, and an unsecured claim is fixed in dollars at the petition date.
- 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. 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 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.
Security & recovery
The attacks that take funds, and what is worth doing in the hour after something goes wrong.
- Can stolen crypto actually be recovered? Rarely, and never by paying a recovery service up front. On-chain transfers are irrevocable, and the mechanism that works best runs on bank rails.
- What is address poisoning and how do I avoid it? An attacker seeds your history with a lookalike address so you copy the wrong one. The defence is checking the middle characters, not the first and last few.
Fintech banking & payments
Where money in a fintech app really sits, what pass-through insurance requires, and why accounts get frozen.
- Is money in a fintech app actually FDIC insured? Not by the app. Coverage attaches at a partner bank, and only if three pass-through conditions are met. The app failing is not the insured event.
- Why did my fintech account get frozen? Usually a compliance review, a sanctions block, a court order or failed re-verification. Federal law bars staff from telling you a suspicious report exists.