The enigma still remains in the decision-making process of how regulators will handle crypto and blockchain technology.
The United States has played a leading role in the regulation of cryptocurrencies and covers areas ranging from taxation of cryptocurrencies to securities laws, financial crime prevention and state level regulation.
Taxation of Cryptocurrencies: In the US, cryptocurrencies are considered property by the IRS (Internal Revenue Service) and are therefore taxed. Trading, mining and/or gifts are subject to taxation. For more information on taxing cryptocurrencies, see the IRS’s guide on cryptocurrencies.
Securities and Exchange Commission (SEC): While the SEC generally classifies cryptocurrencies as securities, other institutions may have different opinions. This creates uncertainty about what laws cryptocurrencies are subject to. If subject to securities law, it regulates the sale and trading of cryptocurrencies and helps prevent fraud.
Money Laundering and Information Reporting Laws: Cryptocurrencies are considered “money or money substitute” by the Financial Crimes Enforcement Network (FinCEN). FinCEN makes and enforces regulations on the use of cryptocurrencies.
State Level Regulations: In the USA, each state has its own laws and regulations. This series of rules, which varies from state to state; It has different contents for crypto assets used for sale, mining and gifting.
Legal Status of Cryptocurrencies: Cryptocurrencies are very likely to be subject to consumer protection laws as these laws ensure that cryptocurrencies are fair to their users and protect them from fraud.
Resources:
- https://www.irs.gov/businesses/small-businesses-self-employed/digital-assets
- https://www.sec.gov/spotlight/cybersecurity-enforcement-actions
- https://www.fincen.gov/resources/statutes-regulations/guidance/application-fincens-regulations-persons-administering
- https://www.ncsl.org/research/financial-services-and-commerce/cryptocurrency-2018-legislation
- https://www.loc.gov/collections/publications-of-the-law-library-of-congress/about-this-collection/
