Since Bitcoin has firmly established itself in mainstream media and most crypto investors’ portfolios, many are looking to find out more about this digital asset class. As they discover more about the cryptocurrency industry, a lot of people have been left wondering, “is Bitcoin legal”? A little more complex than a standard yes or no, let’s get started with what you need to know about the topic.
What Is Bitcoin?
Before we can ask is Bitcoin legal we must first understand the fundamentals. Bitcoin is the first cryptocurrency to come into existence and was created in response to the global financial crisis. The first digital currency was created on the back of blockchain technology, a course that most other digital currencies followed. The technology allows for the seamless transaction of funds from one person to another, without going through a third party. With no interference from the government or banks, the cryptocurrency operates in a decentralized manner allowing for faster and cheaper transactions. As cryptocurrencies operate entirely online there are no border restrictions. However, some countries have put up sanctions when it comes to crypto trading.
Why Bitcoin’s Legality Is Important
In the last few years, there has been an upsurge in government organizations trying to put together laws and regulatory frameworks surrounding cryptocurrencies. While cryptocurrencies were designed to operate outside of governments’ control, the truth is that as they become more integrated into mainstream financial services there is an obligation from the government to get involved.
Responsible for protecting personal funds and ensuring that money laundering and illicit activities are avoided, many governments have created departments to create and oversee regulations. Two classic examples of when these responsibilities were neglected are the Mt Gox hack and Silk Road.
Mt Gox was the largest Bitcoin exchange in 2013 and 2014 before being subject to a hack that stole 850,000 Bitcoin from the platform’s users. With laws in place surrounding the nature of how exchanges are managed, government agencies believe that this can be avoided going forward. On the other hand, Silk Road was a marketplace on the dark web selling illegal goods for cryptocurrencies. The platform was launched in 2011 and served over 100,000 users in the two years leading up to the FBI takedown. In 2013, thousands of BTC were seized from accounts on the platform and the Silk Road marketplace was shut down. The FBI also arrested the founder, Ross Ulbricht, who received the harshest sentence possible: five sentences, including two of life imprisonment without the possibility of parole, which is to be served concurrently.
Mt Gox and Silk Road both contributed to the bad name that cryptocurrencies received, and caused authorities to crank down and start regulating the way these digital currencies can be operated. Implementing identity verification regulation was of significant importance.
Is Bitcoin Legal?
While government regulations might sound detrimental to cryptocurrencies, the fact is that this isn't the case. With more regulation comes more trust, and with more trust comes more investors. Deciphering whether Bitcoin is legal will depend on where you are located, and what you are doing with the digital currency.
While most developing countries have given Bitcoin the green light, several countries have taken a stance against its use. Countries like Algeria, Bolivia, Morocco, Nepal, Pakistan, and Vietnam have all banned the use of Bitcoin and other cryptocurrencies.
Bitcoin can be, and is, widely used as a medium of exchange. Bitcoin is widely accepted as a payment method for goods and services, as well as a store of value. With the recent wave of large firms investing in cryptocurrency, Bitcoin has become a popular and wise addition to investment portfolios around the world.
It is important to check the crypto-related laws in your country of residence, as well as the tax implications involved. While Bitcoin is legal, it still needs to be used in accordance with the laws associated with fiat currencies.
How To Buy Bitcoin
Is Bitcoin legal in your country? If the answer is yes and you’re looking to buy the cryptocurrency, look no further than Oobit. Secure, straightforward, and quick, you can go from cash to crypto in minutes with the built-in credit and debit card facilities. Better yet, the platform will create a unique wallet for you that you can use for the safekeeping of your newly acquired BTC. Stored in a military-grade air-gapped vault, you can rest assured that your crypto is always secure.