Is Bitcoin Legal?
Bitcoin is of interest to law enforcement agencies, tax authorities, and legal regulators, all of which are trying to understand how the cryptocurrency fits into existing frameworks. The legality of your bitcoin activities will depend on who you are, where you live, and what you are doing with it. Bitcoin has proven to be a contentious issue for regulators and law enforcers, both of which have targeted the digital currency in an attempt to control its use. We are still early on in the game, and many legal authorities are still struggling to understand the cryptocurrency, let alone make laws around it. Amid all this uncertainty, one question stands out: is bitcoin legal? The answer is, yes, depending on what youre doing with it. Read on for our guide to the complex legal landscape surrounding bitcoin. Most of the discussion concerns the US, where many of the legal dramas are currently playing out. Alternatively, you can accessour comprehensive Regulation Report for worldwide expert commentary here . Government agencies are increasingly worried about the implications of bitcoin, as it has the ability to be used anonymously, and is therefore a potential instrument for money laundering. In particular, law enforcers seem to be concerned about the decentralized nature of the currency. As early as April 2012, the FBI published a document highlighting its fears around bitcoin specifically, drawing a distinction between it and centralized digital currencies such as eGold and WebMoney. It voiced concerns that while US-based exchanges are regulated, offshore services may not be, and could be a haven for criminals to use bitcoin for illicit activities without being traced. Bitcoin was the only form of currency accepted on Silk Road, an anonymous marketplace that was only accessibl Continue reading >>
U.s. Government Cracks Down On Illegal Bitcoin Money Transmitters
U.S. Government Cracks Down on Illegal Bitcoin Money Transmitters Owning and operating a money transmitter service in the U.S. is illegal unless it is registered with State agencies. Unfortunately, this is also true if one uses Bitcoin to exchange for fiat currency.Bitcoin is not immune from State or Federal laws regulating the flow of money, and agentscan track bitcoin transfers over the blockchain. Also read: Bitcoin Advocates Prepare to Fight the California Bitlicense apparentin the last few years as at least 4 people have been arrested and charged with financial crimes related to the illegal transmission of Bitcoin. All the cases involved individualsallegedly exchanging Bitcoin for a fee. Some of the individuals advertised these services online in a furtive or overt fashion. They were caught after local or federal agents began an investigation, and sometimes after the suspects transferred bitcoin to an undercover officer for a fee. However, sometimes there was not even an investigation, only suspicion and an ill-gotten warrant. Recent Cases of Bitcoin Transmitter Crimes In a recently circulated case, a Missouri man pleaded guilty to conducting an unlicensed and unregulated money transmitter service. The man, Jason R. Klein, posted advertisements on the internet to exchange Bitcoin for cash. The Missouri attorneys office statement said, Between Feb. 6, 2015, and July 27, 2016, Klein, acting with another, met with two undercover federal agents on numerous occasions to exchange bitcoin for cash. Todays plea agreement cites five separate transactions in which money (ranging from $1,000 to $15,000) was exchanged in person for an electronic transfer of bitcoin. Each of the transactions included a fee that Klein or another person charged the undercover agents, for a total Continue reading >>
Could The U.s. Ban Bitcoin?
The government of the United States could try and make bitcoin illegal to use for payments, however this is increasingly unlikely and would be very difficult already. Making ownership of a digital currency illegal would likely not hold up in courts. The IRS has provided guidance on how to treat bitcoin (as a commodity) for tax purposes.  One arm of the government would fight the other if there is an attempt to cut-off this revenue source. US Marshals have themselves sold bitcoin.  US-based companies are doing well in the space. Money talks in US politics. By embracing bitcoin, there is less chance of truly anonymous cryptocurrencies from becoming the market leader. By making sure that the dominant businesses like Circle, Coinbase, Bitfinex, Kraken, Bitpay, etc are American and following AML/KYC; U.S. law enforcement gains a significant advantage in terms of monitoring or even blocking payments. As long as Russia remains openly hostile towards cryptocurrency, the US will probably think it is a good idea :-) One concern I have is that use of cryptocurrency as a currency is already extremely burdensome for Americans because of the IRS reporting requirements. Keeping a detailed record of every purchase & trade for products and fiat, every donation and gift, the date and value in USD of the bitcoin, etc. is completely unrealistic. Nobody does this with cash for example. People will either not report correctly or they may just stop using bitcoin to buy things. The current IRS definition makes bitcoin very attractive to stock markets and traders (who can write-off losses, etc), but somewhat ridiculous for normal US citizens using it as money. This is not the case in many other countries (eg: Switzerland) where it can be treated more-or-less as a foreign currency. This c Continue reading >>
Heres How The U.s. And The World Regulate Bitcoin And Other Cryptocurrencies
Heres how the U.S. and the world regulate bitcoin and other cryptocurrencies Regulators all over the world have begun to address the challenges presented by virtual currencies that mostly bypass regulated banks, financial firms, exchanges and central clearinghouses. Digital currencies, token sales and blockchain initiatives of all types have ignited a global phenomenon unlike anything I have ever seen, said J. Dax Hansen, a partner at law firm Perkins Coie who leads its Blockchain Technology & Digital Currency industry group. As the technology underpinning these developments disrupts products and services in nearly every industry, law makers, regulators and law enforcement are scrambling to keep up. Because the current players in virtual currencies including the most popular bitcoin BTCUSD, -1.97% US:BTCF8 largely operate outside of the conventional financial system, regulators are concerned about money laundering, terrorist financing, tax evasion and fraud. And: Bitcoin tumbles 10% as South Korea moves to curb crypto trade In the U.S., the Securities and Exchange Commission and the Commodity Futures Trading Commission have sent out a flurry of announcements in the last few months on the subject, including some strong statements by Jay Clayton, the SEC chairman. Where we see fraud, and where we see people engaging in offerings that are not registered, we are going to pursue them because these types of things have a destabilizing effect on the market, said Clayton at a meeting at the Federal Reserve Bank of New York at the end of November. Heres what U.S. regulators are currently doing: SEC has not approved any exchange-traded products (such as ETFs) holding cryptocurrencies or other assets related to cryptocurrencies for listing or trading. SEC has not registered any i Continue reading >>
Bitcoin: U.s. Courts, Federal Judges To Determine Regulation | Money
The U.S. is trying to regulate cybercurrency offerings. Its still unclear whether it has the authority to do so. Federal judges in Brooklyn, New York, are about to rule on the question. In doing so, they could determine whether Bitcoin and other stateless currencies are securities that can be regulated like stocks or bonds. Courts across the country are likely to consult these rulings when considering other cybercurrency cases. If its not a security, then what is it? said Peter Henning, a former SEC and Justice Department lawyer who is now a professor at Wayne State University Law School. In what is believed to be the first criminal case focusing on an initial coin offering, Brooklyn businessman Maksim Zaslavskiy was charged in a case unsealed in November with promoting digital currencies backed by investments in real estate and diamonds that U.S. prosecutors said didnt exist. The Securities and Exchange Commission also sued. U.S. District Judge Raymond Dearie said hell allow Zaslavskiys lawyers in both the criminal and civil cases to challenge whether ICOs can be considered a security under U.S. law. The government has until March 19 to file its argument that cybercurrency is a security. If the judge makes the determination that this is not a security, hed dismiss the criminal case, said Mildred Whalen, Zaslavskiys criminal-defense lawyer. He recognizes this is a fundamental issue in both cases. Its all completely new territory. Another judge in the Brooklyn federal courthouse is being asked to rule on how cryptocurrencies and ICOs should be treated under U.S. laws. In that case, the SEC sued last month against Dominic Lacroix, whom it called a recidivist securities law violator. The SEC says his Canadian company marketed an ICO called PlexCoin to investors in the U.S Continue reading >>
United States, Regulation 2017, Bitcoin And Blockchain Regulation
Anyone interested to know what states in the USA is Bitcoin friendly, which states are Bitcoin unfriendly, and which states are Bitcoin hostile? The answers may surprise you as it did me. Hawaii!? An article I'm sharing below is taken from The regulatory landscape in the United States for virtual currency and blockchain technology is more defined than ever in 2017. As of January 1st, 2017 there are now 13 states with clearly defined positions and/or regulations in regards to the blockchain and digital currency industry. Almost all others remain a grey area with the exception of South Carolina and Montana, both of which have no Money Transmission laws. New Mexico is no longer in that category and in fact introduce regulation effective January 1st, 2017 restricting the activity engaged with virtual currency. There's 15 states total (some grey areas of concern) to be aware of, 5 of which are good and 10 that are not. The other 37 state/territories are grey areas currently. In a nutshell, New York, New Hampshire, Connecticut, Hawaii, Georgia, North Carolina, Washington, and New Mexico have regulations not favorable to virtual currency and should be avoided or addressed. Joe Ciccolo, President of regulatory compliance firm BitAML based in Illinois spoke with dinbits.com and provided some professional thoughts on the 2017 landscape. "For 2017, I'm anticipating that we will see bitcoin exchanges and trading platforms continue to compel bitcoin traders to implement AML/KYC, a phenomenon that appeared to ramp up in the second half of 2016. " - Joe Ciccolo, BitAML. Here's how they stack up from best to worst and some additional information on corporate formation for small businesses looking to incorporate in one of these states. Check out our interactive regulatory landscape map Continue reading >>
What Is Bitcoin? Is It Legal Money? What Could Happen To Bitcoins In 2017?
What Is Bitcoin? Is It Legal Money? What Could Happen To Bitcoins In 2017? Short Bytes:Bitcoins, a form of digital currency that operates on the principles of cryptography, has lately come under the scanner of the authorities throughout the world. So, its become necessary to know what are Bitcoins, how it works, the legal status of Bitcoins as well as what holds in the future of Bitcoins. In the year 1976, F.A Hayek, in his book The Denationalisation of Money, propagated the establishment of competitively issued private money. In the mid-70s,what seemed like a farfetched idea was conceived by yet another Economistin the year 1999. Milton Friedman, an American economist who received the 1976 Nobel Memorial Prize in Economic Sciences, predicted of time where internet, (still in a nascent stage then) would help abolish the role of a government and evolve a currency free from the shackles of the government control. Less than ten years later the prophecy came true when Satoshi Nakamoto, a Japanese, invented a form of cryptocurrency called Bitcoin. The origin of Bitcoins can be traced to the aftermath of the global recession and money crisis of 2008 that shook the whole world economy. In the simplest form, Bitcoins can be described as a Peer to Peer Electronic cash system. Bitcoins can be used as a method of payment for numerous goods and services and for simple transactions like purchasing vouchers, paying bills, etc. In different jurisdictions, Bitcoins are treated as a property, currency, virtual asset, good, security or commodity for the purpose of trading on a stock exchange or commodity exchange. Essentially Bitcoin is a cryptocurrency, i.e., it operates on the principles of cryptography to manage the creation of Bitcoins and securing the transactions. Cryptocurrencies Continue reading >>
Is Bitcoin Legal? - Nasdaq.com
May 05, 2017, 03:25:16 PM EDT By Bitcoin Magazine, Bitcoin Magazine It's understandable to have questions about the legality of using Bitcoin. The platform introduced a brand new paradigm away from the traditional regulators and regulations that govern fiat currency. Unlike illegal, counterfeit money, which is a blatant example of a "currency" that misrepresents itself as legal tender, Bitcoin is entirely different. Nevertheless, it operates in a seemingly gray area when it comes to regulation. However, many of these concerns boil down to misunderstandings or a lack of concrete rules that govern Bitcoin, rather than overt violations of the law. The question surrounding the relationship between Bitcoin and the law really depends on how the digital currency is being used. Ever since the now-defunct Silk Road gained notoriety, regulators have been concerned about Bitcoin's semi-anonymity and decentralized nature. In the U.S., as well as in other countries, authorities fear that the platform could be used for money laundering and the purchase of illicit goods without being traced. Not helping Bitcoin's reputation with authorities was its prevalence as a payment service for the Silk Road, a digital marketplace where users could purchase illegal goods. Whether or not people use Bitcoin as a way to participate in expressly illegal activities doesn't make the digital currency itself illegal. The illegality of the activity is the issue, whether it's paid for in bitcoin, cash or gold. However, even when bitcoin is used for legitimate purposes, rules are a little more complex. According to the U.S. Treasury Department's Financial Crimes Enforcement Network , as of 2013, using bitcoin to purchase well-natured goods and services is not illegal. However, those who mine bitcoins and Continue reading >>
Where Is Bitcoin Legal?
Bitcoin Foundation Seeks Legal Protection From Us Currency Regulation
Bitcoin Foundation seeks legal protection from US currency regulation Executive DirectorLlew Claasendenounces'premature decision' to oversee cryptocurrency LlewClaasen,Executive Director of The Bitcoin Foundation, has announcedthat the organisationhas retained legal counsel to advisein its effort to fight against increasing federal and state regulation in the US. The foundation believes that increases in regulation are attempts to control and stifle the adoption and use of so-called virtual currencies such as Bitcoin . In a press release, Claasen claimed that the organisations first priority is to attempt to build a more open and diverse dialogue with the USCongress. The effort is a response to the planned introduction of a bill thataims to bring Bitcoin into the scope of USmoney-laundering enforcement agencies. Bitcoin is a virtual currency or "cryptocurrency" thatwas created by an unknown programmer (or group of programmers) under the name of Satoshi Nakamoto in October 2008. Unlike traditional forms of currency, Bitcoin and other cryptocurrencies use encryption techniques to regulate the generation of currency and thetransfer of funds. This means that the currency is decentralised so no single institution controls the Bitcoin network. At the time of writing, one Bitcoin is approximately worth 3,365.27. Bitcoin surges up as it targets people without internet access Because of encryption, the use of Bitcoin can remain anonymous. Though receipts of transactions are stored in "blockchains", users of the currency do not have their names, address, or other forms of personal information attached to their Bitcoin profiles. While some high street shops and bars accept the currency, many people associate the use of Bitcoin with the buying and selling of illicit services on th Continue reading >>
Is Bitcoin Legal?
Its understandable to have questions about the legality of using Bitcoin. The platform introduced a brand new paradigm away from the traditional regulators and regulations that govern fiat currency. Unlike illegal, counterfeit money, which is a blatant example of a currency that misrepresents itself as legal tender, Bitcoin is entirely different. Nevertheless, it operates in a seemingly gray area when it comes to regulation. However, many of these concerns boil down to misunderstandings or a lack of concrete rules that govern Bitcoin, rather than overt violations of the law. The question surrounding the relationship between Bitcoin and the law really depends on how the digital currency is being used. Ever since the now-defunct Silk Road gained notoriety, regulators have been concerned about Bitcoins semi-anonymity and decentralized nature. In the U.S., as well as in other countries, authorities fear that the platform could be used for money laundering and the purchase of illicit goods without being traced. Not helping Bitcoins reputation with authorities was its prevalence as a payment service for the Silk Road, a digital marketplace where users could purchase illegal goods. Whether or not people use Bitcoin as a way to participate in expressly illegal activities doesnt make the digital currency itself illegal. The illegality of the activity is the issue, whether its paid for in bitcoin, cash or gold. However, even when bitcoin is used for legitimate purposes, rules are a little more complex. According to the U.S. Treasury Departments Financial Crimes Enforcement Network , as of 2013, using bitcoin to purchase well-natured goods and services is not illegal. However, those who mine bitcoins and trade them for traditional currency or operate exchanges on which bitcoins a Continue reading >>
Usa Cryptocurrency Regulation
USA Cryptocurrency regulation - top 5 US states How CryptoKitties affect Ethereum price? Ethereum and Bitcoin analysis Is Bitcoin legal in the US? Well, it depends on the state. Today, we discuss the USA Cryptocurrency regulation specifics in 5 major US states. With cryptocurrency trend on the rise , more and more authorities prefer to regulate the virtual currency. 23 June, AtoZForex Regulation of digital currencies is one of the most talked-about topics these days. Where some countries believe there is no sense of regulating Bitcoin, other nations have determined positions in relation to Bitcoin regulation is it either legal or illegal . Today, we will discuss the legal status of digital currencies in some of the US states: Washington, Illinois, Hawaii, California, and Florida. Specifically, we will go over the details of the states frameworks that contribute to USA cryptocurrency regulation. Washington authorities have commenced creating new rules that involve Bitcoin transactions. Specifically, businesses that are operating in digital currency services sector, will need to follow the new framework. In fact, the Senate Bill 5013 is featuring the definition of cryptocurrency. It also includes a number of disclosure agreements on consumer information. The upcoming law will oblige online currency exchanges in Washington to maintain a surety bond. The officials have introduced the bill in January. Presently, it is ready to be reviewed by the Governor Jay Inslee. Some industry observers believe that the officials will favor the new bill. In spite of this regulation developments, some of the cryptocurrency related startups are hesitant about operating in this state. The Secretary Bryan A. Schneider of the Illinois Department of Financial and Professional Regulation (IDFPR Continue reading >>
Ripple - Is It Legal To Buy Concurrency In Usa - Bitcoin Stack Exchange
closed as off-topic by Max Vernon , Andrew Chow Nov 22 '17 at 18:06 This question does not appear to be about Bitcoin within the scope defined in the help center . If this question can be reworded to fit the rules in the help center , please edit the question . 1/ Yes, it is legal. Both Coinbase and Bittrex as US based exchanges working under federal requirements. 2/ Yes, it is seen as taxable by the IRS since it is viewed as an asset like a stock rather than a currency which can be spent. 3/ Treat trading crypto-currency like trading stocks, once you realize a gain after selling then you are liable for capital gains tax. turbotax.intuit.com/tax-tips/tax-payments/ AR71 Nov 22 '17 at 7:35 I'm voting to close this question as off-topic because this topic is asking for legal advice. Please consult a lawyer. Max Vernon Nov 22 '17 at 15:20 Please advise which stackchange can I post this question. I do believe that lawyers are not at the top of crypto currency questions at the moment. This is why we have supporting communities such as this forum. Thank you Karoly Nov 22 '17 at 15:23 Continue reading >>
Is Bitcoin Legal In The Us?
By Mara Lesemann | December 15, 2015 12:46 PM EST The digital currency known as bitcoin was created in 2009 by a person called Satoshi Nakamoto, but whose true identity has never been established. It is legal to use bitcoin in the United States, and payments are subject to the same taxes and reporting requirements as any other currency. There is no physical bitcoin currency the way there is a dollar, euro or pound. It exists only on the Internet, usually in a digital wallet , which is software that stores relevant information such as the private security key that enables transactions. Ledgers known as blockchains are used to keep track of the existence of bitcoin. It can be given directly to or received from anyone who has a bitcoin address via so-called peer-to-peer transactions. It is also traded on various exchanges around the world, which is how its value is established. Bitcoin exists in a deregulated marketplace ; there is no centralized issuing authority and no way to track back to the company or individual who created the bitcoin. There is no personal information required to open a bitcoin account or to make a payment from an account as there is with a bank account. There is no oversight designed to ensure the information on the ledger is true and correct. The Mt. Gox bankruptcy in July 2014 brought to the forefront the risk inherent in the system. Roughly $500 million worth of bitcoin listed on the company's ledgers did not exist. In addition to the money that account holders lost, the blow to confidence in the currency drove its global valuation down by $3 billion in a matter of weeks. The system had been established to eliminate the risk of involving third parties in transactions, but the bankruptcy highlighted the risks that exist in peer-to-peer transactio Continue reading >>
25 Exchanges To Buy Bitcoin In The United States
Hong Kong-based Bitfinex has long been one of the largest USD Bitcoin exchanges in the world. Bitfinex accounts may be funded by bank wire only, their fee on accepting such transfers is low at only 0.1%. In August 2016, however, it was hacked and lost around 30% of its users funds. While Bitfinex can be helpful for buying large amounts of bitcoins, it is probably best to not use the exchange until it fully compensates affected users. Very low fees even for low volume buyers; 0.1% for market makers and 0.2% for market takers One of the best ways to buy large amounts of bitcoins Allows lending of fiat or bitcoin to margin traders at interest (but this is risky in light of the hack) Very deep liquidity promotes a price close to fair market rate Was recently hacked and has yet to fully compensate all users for their loss Geared towards traders; possibly quite confusing for first time buyers Continue reading >>