Cryptocurrency has become a hot topic of discussion in recent years, with many people investing in it and many others still hesitant about its legality. The United States is one of the largest cryptocurrency markets, but many people still wonder whether it is legal in the country. In this blog post, we will explore the legality of cryptocurrency in the USA.
What is cryptocurrency?
Before diving into cryptocurrency’s legality in the USA, it’s important to understand what cryptocurrency is. Cryptocurrency is a digital or virtual currency that uses cryptography for security. It operates independently of a central bank and can be transferred between individuals without needing a financial intermediary.
Is cryptocurrency legal in the USA?
The legality of cryptocurrency in the USA is a complex issue. While cryptocurrency is not illegal, it is not fully regulated either. The government has taken steps to regulate cryptocurrency, but there is still a lot of uncertainty surrounding its legality.
In 2013, the Financial Crimes Enforcement Network (FinCEN) issued guidance stating that virtual currencies, including Bitcoin, are considered money transmitters and are subject to the same regulations as traditional money transmitters. Companies that deal with virtual currencies must register with FinCEN, comply with anti-money laundering (AML), and know your customer (KYC) regulations.
In 2015, the Internal Revenue Service (IRS) issued guidance stating that virtual currencies are treated as property for tax purposes. This means that any gains or losses from the sale or exchange of virtual currency are subject to capital gains tax.
In 2018, the Securities and Exchange Commission (SEC) stated that some cryptocurrencies may be considered securities and would therefore be subject to federal securities laws. Companies that issue cryptocurrencies may be required to register with the SEC and comply with securities laws.
In 2019, the Commodity Futures Trading Commission (CFTC) issued guidance stating that virtual currencies are commodities and are subject to the same regulations as other commodities, such as oil or gold. This means that companies that deal with virtual currencies may be subject to regulation by the CFTC.
In summary, while cryptocurrency is not illegal in the USA, it is subject to various regulations by different government agencies. Companies that deal with virtual currencies must register with FinCEN, comply with AML and KYC regulations, and may be subject to SEC and CFTC regulations.
The legality of cryptocurrency in the USA is a complex issue that is still evolving. While