What Are The Laws Of Cryptocurrency?

Laws Of Cryptocurrency
Written by Peace

Cryptocurrency has become widely accepted as a way of investing and as a means of payment.

Some users might be wondering what the laws of cryptocurrency will be. The truth is that some laws govern cryptocurrency. 

Irrespective of the growth and popularity in the crypto world, few laws and regulations to guide investments and other means of payment have been proposed/ These laws and rules are mainly for the protection and security of crypto users all over the globe. 

CFTC is responsible for regulating the trading of crypto futures and spot markets, while the SEC guides and monitors the emergence of crypto, including coin offerings, to make sure that they are not used as securities.

So there are some issues involved in cryptocurrency laws, and we will be looking into them and possibly looking at the wings of regulations.

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What Is Cryptocurrency 

You should understand what cryptocurrency is before going down to cryptocurrency laws. 

A cryptocurrency is a form of virtual money used for investments, payments, and other financial dealings. We will probably be used to bitcoin, which is just one type of cryptocurrency. It was the first cryptocurrency that emerged in 2009, but many cryptocurrencies are on the market today. Irrespective of other cryptocurrencies, bitcoin is still the most popular in the market.

All the dealings of cryptocurrencies are done online. It is transferred, bought and sold online, and you can access them through a crypto wallet where it is held.

Any financial service that deals with crypto, whether buying or selling, will possess a digital wallet. Banks are not necessarily involved inun-hostingg cryptocurrencies. It is an online world. 

Current Crypto Regulations 

In the USA, all regulations on cryptocurrency are only on the proposal and based on bank secrecy. The aim is for the U.S. financial institution to assist in detecting and preventing money laundering. 

Following the 2001 World Trade Center attacks, U.S. financial institutions were required by an amendment to the BSA and Subsection III of the Patriot Act to identify, report and prevent terrorist money laundering activities.

The Provincial Crimes Enforcement Network (FinCen) is a U.S. Treasury Center responsible for administering the Bankruptcy Act and collecting and sharing financial intelligence and crime.

FinCen issued a directive in 2013 to include cryptocurrency exchanges (places where you can buy and sell crypto) within the definition of a remittance, making them subject to BSA rules and the Patriot Act.3

In December 2022, a new law was proposed, all aimed at cryptocurrency money laundering. In this new rule, money transmitters will be required to keep and identify all members or parties in cryptocurrency transactions investing or trading over  $3,000 with an unhosted wallet or even a country that the FinCen has listed.

If your transaction is high, the transmitter will submit your name and address to FinCen. This law is almost the same law that is applied to bank wire.

Biden management has suspended all pending legal changes, so no further action on FinCen’s proposal has been taken.

However, in an interview with CNBC, Treasury Secretary Janet Yellen had expressed concern that Bitcoin was ineffective and could be used for illegal money transfers and laundering.

So it may appear that there will be more cryptocurrency laws to fight against before any damage is caused.  

One of the most well-known examples of how cryptocurrency can be used to commit crimes is a black market site on the Silk Road website.

The site area operated from 2011 to 2013 as a marketplace for drugs, counterfeit documents, ransomware, and other illegal goods and services. The site uses bitcoin as a payment method to hide user information.

As a result, laws have to be in place to prevent this market from using cryptocurrencies to commit crimes and theft. 

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Laws Of Cryptocurrency In Some States

Each country or state has laws on cryptocurrency. They may have a slight difference, but they aim to achieve the goal of preventing people from using currencies as a medium of committing a financial crime. 

1. Laws Of Cryptocurrency In Canada

Canada was the first country to approve the use of bitcoin as a means of payment and investment. They have placed a mandatory law that dealers and investors of cryptocurrency in the country must register under the provincial regulators.

They also classified cryptocurrency under money service and firm, and as such, you must have to register under the financial transactions center of the country.

2. Laws Of Cryptocurrency In The United Kingdom 

The United Kingdom views cryptocurrency as an asset but not a legal tender. Additionally, cryptocurrency users must register with the U.K. Financial Conduct Authority (FCA).  

In addition, the regulatory body has introduced cryptocurrency-specific requirements related to your customer acquisition (KYC), as well as the AML mentioned above and CFT.

Therefore, although investors still pay high-interest rates on crypto trading profits, the tax generally depends on crypto transactions made and who participates in the sale.

3. Laws Of Cryptocurrency In China

Emerging global powers do not include cryptocurrencies as a legal tender; however, it classifies them as assets to determine assets.

The People’s Bank of China (PBOC) bans cryptocurrency trading in the country, saying it makes it easier to finance the public without permission.

The world’s largest crypto exchange, Binance, was initially introduced in China but had to be moved to headquarters following the country’s oppression.

4. Laws Of Cryptocurrency In Australia 

Cryptocurrency is classified as a legal property in Australia and, as such, is subject to laws set by the country. Cryptocurrencies are exchanged freely in the country as long as you abide by the laws.

If you are an investor or a dealer in cryptocurrencies, you must register with the Australian transaction reports and analysis center. As a dealer, you must follow the regulatory requirements to invest freely in the country. 


Cryptocurrencies are accepted around the globe, but still, there are proposed laws to enforce cryptocurrencies to help manage the risk of crimes. 

If you are aspiring to invest in cryptocurrency, I hope this post enlightens you on the laws of cryptocurrencies. Furthermore, this will help you get your mind ready and prepared to follow the laws. 

If you have any questions, do well to drop them below the comment section, and they will be attended to. 

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