Questions tagged [cryptocurrency]

Questions concerning the laws on creating, using, transfering and realising cryptocurrency.

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Is it against the law to sell Bitcoin at a flea market?

I think this would be a cool side gig and I have some ideas about how to make Bitcoin more accessible to the general public. But I don't want to break the law either. These would be normal flea ...
user875234's user avatar
14 votes
1 answer
2k views

Can a person be prosecuted for unknowingly possessing illegal computer files?

Today there was a news article that claims researchers have found illegal files embedded in the Bitcoin blockchain. This is a large database-type file that contains a list of all the Bitcoin ...
JPhi1618's user avatar
  • 483
12 votes
2 answers
9k views

Can one avoid paying US income tax by being paid in Bitcoin?

Is it possible for a U.S. citizen to evade income tax by being paid in Bitcoin?
mcchucklezz's user avatar
10 votes
1 answer
4k views

Can a person hack bitcoin private keys and legally claim the bitcoins for himself?

First, some background knowledge — bitcoins are a form of cryptocurrency that can be stored in "addresses". Each bitcoin address is linked to a specific private key. To access bitcoins in a specific ...
Anonymous's user avatar
  • 121
9 votes
1 answer
1k views

How does insider trading law affect bitcoin exchanges?

The Bitcoin network is predicated on the premise that it is difficult to find 'low' hash values for a given input. This is an incredibly safe bet because of the way the algorithm is implemented - if ...
Stewart_R's user avatar
  • 191
8 votes
1 answer
4k views

When does it become illegal to exchange bitcoin for cash?

I've read several "stings" and raids for running unlicensed money transfer businesses for people buying and selling bitcoin on localbitcoins. All of the articles are extremely vague and don't explain ...
user5389726598465's user avatar
8 votes
4 answers
484 views

Is an 'honest', tongue-in-cheek ponzi scheme ICO still illegal to operate?

I've just come across what appears to be a deliberate parody ICO known as PonziCoin. It declares itself to be "The World's First Legitimate Ponzi Scheme", on the grounds that it is open and ...
user avatar
6 votes
1 answer
471 views

Do FCA rules mean financial firms have to refuse service if their customers are not knowledgeable enough?

I recent weeks I have had emails from multiple cryptocurrency exchanges requiring me to fill in a document online to keep using their services. They describe this as a questionnaire but say "You ...
User65535's user avatar
  • 6,526
6 votes
2 answers
886 views

Is it possible for an individual to commit money laundering like a bank?

In the classic example of money laundering, Charlie the Criminal would take his dirty money to Bob the Banker and get it in some form that is spendable and transferable. In this situation it would be ...
Sam's user avatar
  • 81
4 votes
1 answer
604 views

Exploiting a bug in bitcoin is unethical, but is it illegal? [duplicate]

Suppose I found a bug in bitcoin or any other cryptocurrency that allows me to create as many coins as I want. What would be the legal implications in jurisdictions like: USA Europe (UK, Germany, ...
7uhi0's user avatar
  • 49
4 votes
1 answer
481 views

Paid in Bitcoin - Company can't deliver and wants to return money in other currency

For about one month I ordered something at a company and paid in bitcoin (0.015Ƀ). The value at that time was about 25$ The company confirmed that they received the payment. Unfortunately they can't ...
user avatar
4 votes
0 answers
68 views

Bitcoin service regulations

Most governments don't consider Bitcoin to be currency, so it's somewhat of a legal gray zone regarding regulation. I know most exchanges must follow KYC/AML systems because they trade with fiat too, ...
thatguylowjwj's user avatar
3 votes
3 answers
2k views

Is it legal to trade bitcoin for cash in Virginia, USA?

I was wondering if trading bitcoin for cash (for example payments on Apple Cash, Venmo or Zelle) is legal in Virginia (USA) or not. I would like to know before I start selling some of my bitcoins.
solid's user avatar
  • 181
3 votes
2 answers
215 views

Can bitcoins be taxed?

Let's say I give someone a bitcoin and then they give me a phone. Could the IRS — or a similar organization, if outside the U.S. — say I bougth the phone and take a chunk of the bitcoins? What if ...
Christopher King's user avatar
3 votes
2 answers
142 views

Does bitcoin count as income in the U.K.?

If I mine bitcoin, would it count as income in the UK? If so, would I have to declare the value of my bitcoin on any forms which ask for how much money/income I have?
user15148's user avatar
3 votes
2 answers
379 views

Is it legal to create a cryptocurrency?

I want to create a new cryptocurrency as an experiment. Is this legal? My cryptocurrency won't use a blockchain, so laws specifically regulating blockchains might not apply. The system will be ...
Someone's user avatar
  • 16.5k
3 votes
1 answer
107 views

Harper v. IRS and the third-party doctrine

On tax day 2020, plaintiff James Harper accused the IRS of obtaining his cryptocurrency transaction history from Coinbase without a warrant. Harper is claiming the IRS violated his rights under the ...
Gascoyne's user avatar
  • 163
3 votes
1 answer
345 views

Legality of Virtual Currency to Purchase Real World Items

A while ago, I saw a company called Listia which would permit users to sign up and attain some amount of Credits. These Credits could then be used to purchase real-world items on the site, such as ...
eithermonad's user avatar
3 votes
1 answer
126 views

Do Bitcoin nodes need consent to store EU citizen's personal data?

The Bitcoin blockchain stores data about bitcoin users. This includes: There bitcoin address, which is linkable to their identity via blockchain analysis Transactions they have made This would seem ...
Christopher King's user avatar
3 votes
1 answer
64 views

What are the consequences of being party to a OFAC prohibited transaction?

The US Treasury has sanctioned Tornado Cash which is a tool for mixing Cryptocurrency. Since the sanctions don't actually stop this tool from working someone has used it to send small amounts of funds ...
blues's user avatar
  • 165
3 votes
1 answer
165 views

Is cryptocurrency more like money or stuff with regards theft?

I am sure there is a word that describes this concept, but I do not know it so I shall have to describe it. Suppose Alice has a mobile phone, Broke Bob steals it, sells it to Charlie's Mobile Phone ...
User65535's user avatar
  • 6,526
3 votes
0 answers
91 views

Legal to mine bitcoin when on U.K. benefits?

I am a uk citizen lining in England who is currently on ESA benefits since I cannot work at the moment. I understand that I am only allowed a certain amount of money in my name at a time and if I ...
user15148's user avatar
2 votes
3 answers
3k views

How are cryptocurrencies not illegal by the US Constitution?

The United States Constitution, Article I, Section 8 reads in part, The Congress shall have Power To coin Money, regulate the Value thereof, and of foreign Coin. From this passage, I understand ...
Surilan's user avatar
  • 31
2 votes
4 answers
203 views

Sanctions against dealing in Bitcoin

Some countries are treating dealing in Bitcoin as seriously as drug-dealing and money laundering [0]. Suppose that you are a citizen of another country (and normally live in it) that does not have ...
Pat-S's user avatar
  • 217
2 votes
1 answer
374 views

What kind of claims did Ryan Salame forfeit in the FTX trial?

There is a recent article about the trial of Ryan Salame surrounding the crypto-currency platform FTX. The article starts with the big headline that he forfeited $1,5 billion and then writes later on ...
quarague's user avatar
  • 3,328
2 votes
1 answer
127 views

Is Crypto the same as any foreign currency?

A foreign currency exchange is nothing new. On the other hand cryptographic currency ("crypto" i.e. Bitcoin) is relatively new, as are their exchanges. https://abcnews.go.com/Business/...
gatorback's user avatar
  • 7,127
2 votes
1 answer
106 views

If you buy something only sold in cryptocurrencies - for example, a non-fungible token (aka NFT) - is that a potentially taxable event?

Suppose I buy one Etherium cryptocurrency coin and then purchase a non-fungible token for one Etherium coin. One cannot buy an NFT using any other currency than a cryptocurrency, but cryptocurrencies ...
moonman239's user avatar
  • 3,070
2 votes
3 answers
276 views

Who owns the intellectual property rights relating to a stolen NFT?

Bored Ape non-fungible blockchain tokens (NFTs) change hands for tens to hundreds of thousands of dollars. For this money you get two things, A) the technical ability to create transactions involving ...
User65535's user avatar
  • 6,526
2 votes
1 answer
51 views

How consumers taxed with a cryptocurrency prepaid card?

A store decided to issue a prepaid card that can be loaded with cryptocurrency and used only in that store. Will the customers pay tax when they load the card, use it, or both? I am interested in US ...
Ilya Gazman's user avatar
2 votes
1 answer
80 views

What features are used to distingish between investing and running a money transmitting business?

This question about the risk of money laundering prosecution one could face using decentralized cryptocurrency exchanges is answered by "Generally, local laws will define concepts like "...
Sam's user avatar
  • 81
2 votes
1 answer
188 views

Is it legal to include a crypto miner in published software?

If I publish a program (say a text editor), and I include a cryptocurrency miner that puts all of the coins in my wallet (and the mining itself does not accomplish anything that benefits the user, e.g....
Someone's user avatar
  • 16.5k
2 votes
1 answer
119 views

Why can Dutch police order Binance to freeze funds of Colombian customers?

In short, Dutch police ordered Binance (cryptocurrency exchange) to freeze funds of some Colombian customers, and those customers are supposed to prove - to the satisfaction of Dutch police - that ...
xmrk's user avatar
  • 46
2 votes
1 answer
158 views

How could someone whose trades are being copied be liable to the person who is doing the copying?

It is reported that someone was copying the trades of a noted NFT trader. This noted NFT trader profited from this by making an inflated bids on one of his own NFTs, and when the copycat replicated ...
User65535's user avatar
  • 6,526
2 votes
1 answer
75 views

Could everyone with DAO tokens in the EU be punished under recent Transfer of Funds Regulations on KYC?

On March 31st the ECON and LIBE committees of the EU Parliament has voted to require cryptocurrency service providers to collect personally identifiable information from individuals who transact more ...
User65535's user avatar
  • 6,526
2 votes
2 answers
286 views

Capital Gains: If I loan Bitcoin to my LLC, can the LLC sell it to pay for expenses, and later repay the loan in USD tax free? (USA Law)

I understand that taking a credit line against Bitcoin collateral is not capital gains event because there is no sale. However, If a party, such as a company, is lent Bitcoin (BTC), sell it to pay ...
LegalInquirer2000's user avatar
2 votes
1 answer
273 views

Can I cashout 25 BTC without proof of provenance?

Back when Bitcoin was worth under 10 USD, a friend sent me 25 BTC as a gift. Since that time, I moved them around different wallets and don't believe I still have the original wallet where I received ...
maxklein's user avatar
2 votes
0 answers
62 views

How to find a US lawyer for consultation in the open-source + banking + blockchain space?

Considering writing open-source software in the banking/cryptocurrency space (in the USA). Want to do it properly, and have a few questions for how to navigate the space. What's the type of lawyer I ...
gs8282's user avatar
  • 21
2 votes
0 answers
62 views

If I create smart contracts for my clients on fiverr, upwork, etc., can I be arrested in Bangladesh?

The legality of cryptocurrency is a bit tricky in Bangladesh. A cautionary notice issued by the Bangladesh bank on December 24, 2017, said: My translation: Recently, it has been known from various ...
tryingtobeastoic's user avatar
2 votes
0 answers
125 views

Do I need to register as a Money Service Business for a cryptocurrency trading platform?

According to the U.S. Department of Treasury FinCen: Money Service Business Definition. The term "money services business" includes; any person doing business, whether or not on a regular basis or ...
Digital fire's user avatar
  • 5,469
1 vote
1 answer
140 views

How does contract law apply to smart contracts?

We quite frequently hear about some cryptocurrency company losing money because their software was exploited. From example today we have Qubit losing $80 million: The protocol was exploited by; ...
User65535's user avatar
  • 6,526
1 vote
2 answers
300 views

Why can't a cryptocurrency be classified the same way as airline points or store rewards?

According to an article I read on Law360 (paywalled), Facebook's Libra could never be successful as envisioned because the tax reporting burden on it will be too high. Essentially, users will ...
CodyBugstein's user avatar
1 vote
1 answer
122 views

How is a derivative work defined wrt "low entropy" artwork

CryptoPunks are a set of 10,000 Ethereum-based NFTs, each token corresponding to a unique 24 x 24 pixel cartoonish figure. They have been automatically generated from human generated components ...
User65535's user avatar
  • 6,526
1 vote
1 answer
140 views

Would a bitcoin "cleaning" service be legal in New Zealand?

I'd like to create a piece of software or service which takes someone's Bitcoin, goes through a process of "cleaning" it (making it untraceable) and then returning it. Provided the purpose ...
user26532's user avatar
1 vote
1 answer
232 views

Can I build an iPhone app that generates cryptocurrency income without the user's consent or knowledge?

I had an idea of an iPhone app but I'm not sure if the methods are entirely legal. For that reason I thought I would come here to ask. Where I live, in Canada, it can get pretty cold. Hence, I had the ...
Matthew N's user avatar
  • 215
1 vote
1 answer
176 views

Initial Coin Offering restrictions for Non-Resident Aliens (F-1 Student)

United States residents who are not accredited investors are often not allowed to participate in Initial Coin Offerings (ICOs) which are not public offerings for the purpose of U.S. Securities laws. ...
nonKreon's user avatar
1 vote
2 answers
107 views

unregulated or illegal

Today at work I have some arguments with a colleague. He is stating that unregulated technologies are illegal. Not sure if it makes a difference but the technology we were talking about is ...
user1121883's user avatar
1 vote
1 answer
179 views

Do Bitcoin banks need a banking license?

Or consider any currency with no intrinsic link to any other currency or form of capital (i.e., not backed by USD or gold or anything like that), and note that the issuer/bank would not itself offer ...
nellapizza's user avatar
1 vote
1 answer
29 views

What is GST status over Crypto transactions in India?

Even though profit from cryptocurrencies like Bitcoin and Ethereum are taxed at 30%, that is only on converting that into Indian fiat, only then the citizen has to pay the tax of 30% of profits of ...
Profile name's user avatar
1 vote
2 answers
316 views

Why is Silk Road criminal but not LocalBitcoins?

How are the Localbitcoins.com founders safe from money laundering laws? LocalBitcoins says its purpose is to connect buyers and sellers. That legalese makes it escape criminal laws. What about Silk ...
user4234's user avatar
  • 1,091
1 vote
1 answer
211 views

How long does money have to be possessed by a company for it to be considered theft?

I am considering taking a company to small claims court over the "theft" of an amount of money that I will not disclose here. I put money into my account in the form of cryptocurrency (the company is ...
Willothy's user avatar
  • 113