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34 votes
Accepted

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

No. You have to pay taxes no matter what currency you are paid in, or for that matter, in most barter transaction as well. You would have to pay taxes even if you were paid in goats. Also, the ...
ohwilleke's user avatar
  • 218k
18 votes

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

Since sales are in dollar and the OP does not specify a jurisdiction, I will assume Washington state US. You may need a business license, depending on the municipality. There are various permits ...
user6726's user avatar
  • 215k
16 votes
Accepted

How are cryptocurrencies not illegal by the US Constitution?

The Constitution only regulates the powers of the government; it doesn't directly say what the people can and can't do. In particular, it doesn't say directly that nobody except Congress can coin ...
Nate Eldredge's user avatar
15 votes
Accepted

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

In the UK it is an offence to cause a computer to gain unauthorised access to any program or data held in any computer (s1 Computer Misuse Act 1990). It seems likely that other European jurisdictions ...
Lag's user avatar
  • 17.2k
13 votes
Accepted

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

The short answer is that a few individual trades would be legal (e.g. if you sell some to a friend), but doing so on a regular basis for profit (e.g. offering a sale price and a bid price to all ...
Paul Johnson's user avatar
  • 13.5k
10 votes

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

The ultimate question is whether an obviously joke enterprise constitutes a real offering of securities or just performance art (a Ponzi scheme is one of many types of securities fraud). An ...
ohwilleke's user avatar
  • 218k
9 votes

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

Because money laundering is a form of transnational crime there is an extensive system of treaties which harmonise, to some extent, the laws of most developed countries. Relevantly to your question, ...
sjy's user avatar
  • 9,188
8 votes

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

There is indeed a recent change to the FCA's rules concerning invitations to invest in cryptoassets. For these, and certain other kinds of sophisticated investments such as derivatives, the offering ...
alexg's user avatar
  • 6,745
6 votes
Accepted

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

There is a federal law, 18 USC 2252, which criminalized distribution and receiving of child porn. One part of the law addresses a person who (1) knowingly transports or ships using any means or ...
user6726's user avatar
  • 215k
6 votes

Could someone avoid legal responsibility by transferring crypto coins multiple times between wallets before making an illegal purchase?

No If you break the law you are legally responsible. Can you make it more difficult for law enforcement to find and prosecute you? Of course, that's why bank robbers wear masks.
Dale M's user avatar
  • 211k
6 votes

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

united-states If you exchange bitcoin for currency (rather than accept it for purchases), you may be required to register as a Money Services Business (and follow the corresponding regulations). I ...
Brian's user avatar
  • 1,645
6 votes

Does online business, only using crypto currency have collect a tax bill before they can release funds back to an individual?

First and foremost: Whenever an entity claims that you have to pay them money in order for them to pay you even more money right away, you have a clear sign of a scam there. A legimate entity would ...
Arno's user avatar
  • 1,535
5 votes

How are cryptocurrencies not illegal by the US Constitution?

One question is whether Bitcoin etc. are money in a legal sense. They don't attempt to link themselves to any actual currency. It's perfectly legal to trade without actual money. Commerce is ...
David Thornley's user avatar
5 votes

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

It's always amazing to me why some people find it so difficult to understand, just because the word "crypto" is involved. It goes like this: Cryptocurrency is an asset, like any other asset. It's ...
Jack Fleeting's user avatar
5 votes
Accepted

How does contract law apply to smart contracts?

In the case of a smart contract ... it it actually valid? The question is based on the misconception that the terms "smart contract" (technical term) and "contract" (legal term) ...
Greendrake's user avatar
  • 27.5k
5 votes
Accepted

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

No claims against FTX were involved, it's all money lost by Salame to the government to satisfy the judgment from his guilty plea. Ars Technica reports: A money judgment of $1.56 billion was entered ...
Trish's user avatar
  • 39.8k
4 votes
Accepted

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

Are there such restriction for F-1 students who have been in the US for less than 5 years, who are non-resident aliens for tax purposes and are actually not citizens of the US but are citizens of ...
ohwilleke's user avatar
  • 218k
4 votes

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

Yes you would. Bitcoin is a form of property right or asset, just like any other form of wealth. And, income is a positive increase in the sum total of your property rights. You might be able to ...
ohwilleke's user avatar
  • 218k
4 votes

Are identifiable cryptocurrency miners helping crime?

Here are the suggested federal jury instructions for aiding and abetting: To "aid and abet" means intentionally to help someone else commit a crime. To establish aiding and abetting, the ...
D M's user avatar
  • 7,168
4 votes

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

Taxable income (Merriam-Webster) as defined by the IRS is ...generally speaking, is the gross income of an individual or corporation, less any allowable tax deductions. Your taxable income is, ...
BlueDogRanch's user avatar
  • 18.8k
4 votes

How does insider trading law affect bitcoin exchanges?

Your question assumes that there is a method to find a block of bitcoins with a faster computation than the brute force method used so far. If such a faster calculation method exists, it is ...
Codigo's user avatar
  • 139
4 votes

Would using a StableCoin bypass the "Money Transmitter" laws in the US?

I see that this would put me under heavy US regulation, and I'd like to avoid that, since it would require huge funding to hire lawyers to do something like that. There are many reasons for ...
BlueDogRanch's user avatar
  • 18.8k
4 votes

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

The applicable law is the New Zealand Anti-Money Laundering law. The regulations describing exactly what is covered don't mention Bitcoin cleaning, but the "wire transfer" and "currency exchange" bits ...
Paul Johnson's user avatar
  • 13.5k
4 votes

Why is Silk Road criminal but not LocalBitcoins?

It comes down to intent ... and possibly responses to illegal activity. Localbitcoins intention is to facilitate trade in bitcoins - in itself a legal undertaking. Cryptocurrancy transactions can be ...
Dale M's user avatar
  • 211k
4 votes

Sanctions against dealing in Bitcoin

Yes When you enter the jurisdiction of a country, you are subject to its laws. You are not, in general, subject to punishment for things you did before you entered its jurisdiction but if possession ...
Dale M's user avatar
  • 211k
4 votes

Is there any doubt about crypto-currency and like-kind exchanges?

“Real property” is land and things attached to land Everything else (including Bitcoin) is personal property. Therefore, since the 2017 amendment, Bitcoin is not captured by the s1031 like-kind ...
Dale M's user avatar
  • 211k
4 votes

What laws do crypto exchanges need to abide by?

Do the exchanges need to check with each government to make sure the information is valid? Or is submitting documents enough? They need to understand the (usually very complicated) laws governing ...
phoog's user avatar
  • 37.5k
4 votes

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

By using my ETH coin to purchase an NFT, have I just committed a potentially taxable event? Yes. When you purchase something with cryptocurrency, this is treated as a barter transaction for income ...
ohwilleke's user avatar
  • 218k

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