Legal statuses of cryptocurrencies vary between countries and remain undefined in many regions. Some nations allow the use and trade of cryptocurrencies. Others have banned or restricted them. The following eight countries impose complete restrictions on online currencies:
- The United Arab Emirates
15 other countries impose implicit bans on trading and using online currencies, including:
- The Dominican Republic
- Saudi Arabia
In the above case, implicit bans refer to implied but not stated restrictions. Russia considers cryptocurrencies legal, but, using any other currency besides the Russian Ruble to buy goods remains illegal. Since 2009, the demand for and popularity of cryptocurrencies has increased. In turn, so have concerns about this unregulated global economy becoming a threat to society.
Web criminals can use online currencies as tools due to transaction anonymity. Cryptocurrency trading makes tax evasion easier as online currency transactions are independent of official bank systems. Another growing concern relates to money laundering made simpler through cryptocurrencies.
Is it legal to invest in cryptocurrencies?
Yes, investing in cryptocurrencies is legal. Individual investors should take extra precautions when trading and follow tax professionals’ advice when declaring crypto profits and losses due to the ever-changing rules. The crucial legal consideration for online currency encompasses how central authorities view cryptocurrency holdings.
In the U.S., the Internal Revenue Service (IRS) defines online currencies as legal property rather than money. Investors must follow tax laws on capital gains when reporting profits and expenses from cryptocurrencies on tax returns. This creates much confusion for both tax professionals and investors alike.
The potential risk factors involved in online currency investments are endless as online currencies are still part of a decentralised market. These securities have no physical presence or backing from central authorities. Global governments are asserting their regulatory powers as far as possible.
Digital currencies remain independent from jurisdictions and institutions. Investors get abandoned when transaction complications or issues of ownership arise. They could find themselves victims of fraud by criminal organisations.
These people will not have the same legal recourse options as traditional fraud cases because there are no standard practices for recovering stolen or missing crypto funds. There’s no way to end the legal risks involved in owning them.
Is there an age limit for cryptocurrencies?
According to current laws, there’s no defined age limit for buying online currencies. Most exchanges are in line with Know Your Customer (KYC) requirements, which means mandated ages of 18. Underage individuals have found many other ways to get online currencies without breaking any laws.
These methods are subject to interpretation, but some viable ways for teenagers to buy cryptocurrencies include:
- Bitcoin listings on eBay
- Bitcoin ATMs
- P2P exchanges
- Local cryptocurrency groups
- Swapping Amazon Gift Cards on Paxful
- Gifting online currencies
Earning cryptocurrencies as incomes