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Cryptocurrency law

Cryptocurrency law

The system of rules created and enforced through social or governmental institutions for how cryptocurrencies, and blockchain technologies more broadly, are created, used, and traded.

Cryptocurrency law involves sets of codified rules and regulations that govern the ways cryptocurrencies and blockchain-based technologies are created, used, and traded. Cryptocurrency law varies by country and locality and is typically regulated by a government jurisdiction. Cryptocurrency is not legal in all countries, nor do all countries have laws recognizing or regulating cryptocurrency. For example, in Egypt, the Main Islamic legislative and judicial Institution Dar al-Ifta issued a religious decree classifying commercial transactions with bitcoins as haram (prohibited by Islamic law). There are many terms used to refer to cryptocurrency, not to be confused with different types of cryptocurrency (Bitcoin, Ethereum). Cryptocurrency is also referred to as a digital or virtual asset, digital or virtual currency, a virtual commodity, and crypto or payment tokens.

Legal terms used in cryptocurrency law
Types of cryptocurrency law
  • Token and Coin Compliance
  • Cryptocurrency Sales Regulation
  • Cryptocurrency Securities Law
  • Cryptocurrency Transmission Law
  • Anti-money Laundering Cryptocurrency Law
  • Cryptocurrency Tax Law
  • Cryptocurrency Promotion Law
  • Cryptocurrency Ownership and Licensing Law
  • Cryptocurrency Reporting Requirements
  • Cryptocurrency Border Restrictions and Declaration
  • Estate Planning for Cryptocurrency
  • Cryptocurrency Mining Regulations
Initial coin offering (ICO)

According to its “Framework for ‘Investment Contract’ Analysis of Digital Assets", the Securities and Exchange Commission (SEC) uses the "Howey test" to determine whether or not an ICO is a security. The expectation of profit is a critical part of this test. If an ICO is determined to be a security, it must be registered and meet reporting obligations with the SEC.

Notable SEC events

The SEC requires registration of any virtual currency or digital asset traded in the United States. The Commodity Futures Trading Commission (CFTC) and the SEC work closely together on cryptocurrency regulatory issues. According to a ruling by a United States Eastern District of New York federal judge in March 2018, cryptocurrency is regulated as a commodity and falls under the jurisdiction of the CFTC. As a result of this ruling, and the use of cryptocurrency as a money-transmission service, the SEC does not have direct oversight of cryptocurrency transactions. The SEC does monitor and provide oversight for ICOs. In July 2019, the SEC released its "Framework for 'Investment Contract' Analysis of Digital Assets," which provides a framework for when federal securities laws apply to ICOs.

In October 2018, the SEC launched the Strategic Hub for Innovation and Financial Technology (FinHub), which serves as a public resource for the SEC's FinTech-related issues and initiatives. FinHub started a public engagement initiative on blockchain, distributed ledger, and digital assets in 2019. This initiative took the form publications and publicly held events and forums.

In October 2019, the CFTC, SEC, and the Financial Crimes Enforcement Network issued a joint statement that outlined cryptocurrency and digital asset reporting and registration obligations under the Bank Secrecy Act, which protects against money laundering and terrorism financing.

Case law (United States)

Cryptocurrency is regulated under a number of federal acts in the United States. Since 2013, the SEC has charged a number of companies and individuals in cryptocurrency related court cases, administrative proceedings, and cease-and-desist orders. A number of government agencies, including the Federal Trade Commission (FTC), the U.S. Department of Justice (DOJ), and the CFTC, as well as state governments and private individuals, have also filed lawsuits regarding the use and trading of cryptocurrency and intellectual property of blockchain technology. The following is a list of notable laws, court cases, and individuals or entities that have received cease-and-desist notices from the SEC regarding cryptocurrency.

  • Bank Secrecy Act
  • Stamp Payment Act of 1862
  • Electronic Fund Transfer Act
  • Katz v. United States, 289 U.S. 347 (1967)
  • United States v. Warshak, 631 F.3d 266
  • Unlawful Internet Gambling Enforcement Act (UIGEA)
  • Federal Wire Act
  • SEC v. W.J. Howey Co. 328 U.S. 293
  • SEC v. High Street Capital Partners, LLC et al.
  • SEC v. BitClave PTE Ltd.
  • SEC v. Putnam, et al.
  • SEC v. Dropil, Inc., et al.
  • SEC v. Meta 1 Coin Trust, et al.
  • Steven Seagal (SEC cease-and-desist order)
  • Enigma MPC (SEC cease-and-desist order)
  • SEC v. Ackerman
  • SEC v. Grybniak, et al.
  • SEC v. Manor, et al.
  • SEC v. Blockchain of Things, Inc.
  • SEC v. Eyal, et al.
  • SEC v. Tlegram Group Inc., et al.
  • SEC v. Block.one
  • SEC v. Lucas
  • SEC v. ICOBox, et al.
  • SEC v. Bitqyck, Inc., et al.
  • ICO Rating (SEC cease-and-desist order)
  • SimplyVital Health, Inc. (SEC cease-and-desist order)
  • SEC v. Middleton, et al.
  • SEC v. Longfin Corp., et al.
  • SEC v. Kik Interactive Inc.
  • SEC v. Pacheco
  • NextBlock Global Ltd. and Alex Tapscott (SEC cease-and-desist order)
  • SEC v. Natural Diamonds Investment Co., et al.
  • Mutual Coin Fund LLC and Usman Majeed (SEC cease-and-desist order)
  • SEC v. Gladius Network, LLC
  • CoinAlpha Advisors LLC (SEC cease-and-desist order)
  • Munchee Inc. (SEC cease-and-desist order)
  • Floyd Mayweather, Jr. (SEC cease-and-desist order)
  • Khaled Khaled ("DJ Khaled") (SEC cease-and-desist order)
  • Paragon Coin, Inc. (SEC cease-and-desist order)
  • CarrierEQ, Inc., d/b/a Airfox (SEC cease-and-desist order)
  • Zachary Coburn (SEC cease-and-desist order)
  • SEC v. Blockvest LLC, et al.
  • SEC v. 1pool Ltd. a.k.a. 1Broker, et al.
  • TokenLot LLC, Lenny Kugel, and Eli Lewitt (SEC cease-and-desist order)
  • Crypto Asset Management, LP and Timothy Enneking (SEC cease-and-desist order)
  • Tomahawk Exploration LLC and David T. Laurance (SEC cease-and-desist order)
  • SEC v. Jesky, et al.
  • SEC v. Titanium Blockchain Infrastructure Services Inc., et al.
  • SEC v. Sharma, et al.
  • SEC v. Longfin Corp., et al.
  • SEC v. Sharma, et al.
  • SEC v. Montroll, et al.
  • SEC v. AriseBank, et al.
  • SEC v. AriseBank, et al. Jared Rice Sr. and Stanley Ford
  • SEC v. PlexCorps, et al.
  • SEC v. REcoin Group Foundation, LLC, et al.
  • Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO
  • SEC v. Renwick Haddow, et al.
  • In re Bitcoin Investment Trust and SecondMarket, Inc.
  • SEC v. Garza, et al.
  • In re Sand Hill Exchange, et al.
  • In re BTC Trading, Corp. and Ethan Burnside
  • In re Erik T. Voorhees
  • SEC v. Shavers
  • United States v. Faiella
  • State of Florida v. Espinoza
  • United States v. Ross William Ulbricht
  • New York Office of the Attorney General v. Bitfinex
  • Blockchain.com v. Paymium
  • Oracle v. CryptoOracle
  • Bradley Sostack v. Ripple
  • SEC v. Veritaseum
  • Traders v. Coinbase
  • Harrison Hines v. Joseph Lubin
  • New Jersey v. Pocketinns Inc.
  • SEC v. Jon Montroll
  • Department of Justice v. Blake Kantor
  • Department of Justice v. hacking group “The Community”
  • Commodity Futures Trading Commission v. Morgan Hunt and Kim Hecroft
  • CFTC v. Control-Finance Ltd.
  • SEC v. Longfin Corp.
  • U.S. Federal Trade Commission v. Bitcoin Funding Team
Regulation by country

Cryptocurrency is regulated differently by each country or jurisdiction. In some countries various forms of cryptocurrency are recognized as legal tender; in others, all forms of cryptocurrency transactions are illegal.

  • Afghanistan
  • Akrotiri
  • Albania
  • Algeria
  • American Samoa
  • Andorra
  • Angola
  • Anguilla
  • Antarctica
  • Antigua and Barbuda
  • Argentina
  • Armenia
  • Aruba
  • Ashmore and Cartier Islands
  • Australia
  • Austria
  • Azerbaijan
  • Bahamas, The
  • Bahrain
  • Bangladesh
  • Barbados
  • Bassas da India
  • Belarus
  • Belgium
  • Bermuda
  • Belize
  • Benin
  • Bermuda
  • Bhutan
  • Bolivia
  • Bosnia and Herzegovina
  • Botswana
  • Bouvet Island
  • Brazil
  • British Indian Ocean Territory
  • British Virgin Islands
  • Brunei
  • Bulgaria
  • Burkina Faso
  • Burma
  • Burundi
  • Cambodia
  • Cameroon
  • Canada
  • Cape Verde
  • Cayman Islands
  • Central African Republic
  • Chad
  • Chile
  • China
  • Christmas Island
  • Clipperton Island
  • Cocos (Keeling) Islands
  • Colombia
  • Comoros
  • Congo, Democratic Republic of the
  • Congo, Republic of the
  • Cook Islands
  • Coral Sea Islands
  • Costa Rica
  • Cote d'Ivoire
  • Croatia
  • Cuba
  • Cyprus
  • Czech Republic
  • Denmark
  • Dhekelia
  • Djibouti
  • Dominica
  • Dominican Republic
  • Ecuador
  • Egypt
  • El Salvador
  • Equatorial Guinea
  • Eritrea
  • Estonia
  • Ethiopia
  • Europa Island
  • Falkland Islands (Islas Malvinas)
  • Faroe Islands
  • Fiji
  • Finland
  • France
  • French Guiana
  • French Polynesia
  • French Southern and Antarctic Lands
  • Gabon
  • Gambia, The
  • Gaza Strip
  • Georgia
  • Germany
  • Ghana
  • Gibraltar
  • Glorioso Islands
  • Greece
  • Greenland
  • Grenada
  • Guadeloupe
  • Guam
  • Guatemala
  • Guernsey
  • Guinea
  • Guinea-Bissau
  • Guyana
  • Haiti
  • Heard Island and McDonald Islands
  • Holy See (Vatican City)
  • Honduras
  • Hong Kong
  • Hungary
  • Iceland
  • India
  • Indonesia
  • Iran
  • Iraq
  • Ireland
  • Isle of Man
  • Israel
  • Italy
  • Jamaica
  • Jan Mayen
  • Japan
  • Jersey
  • Jordan
  • Juan de Nova Island
  • Kazakhstan
  • Kenya
  • Kiribati
  • Korea, North
  • Korea, South
  • Kuwait
  • Kyrgyzstan
  • Laos
  • Latvia
  • Lebanon
  • Lesotho
  • Liberia
  • Libya
  • Liechtenstein
  • Lithuania
  • Luxembourg
  • Macau
  • Macedonia
  • Madagascar
  • Malawi
  • Malaysia
  • Maldives
  • Mali
  • Malta
  • Marshall Islands
  • Martinique
  • Mauritania
  • Mauritius
  • Mayotte
  • Mexico
  • Micronesia, Federated States of
  • Moldova
  • Monaco
  • Mongolia
  • Montserrat
  • Morocco
  • Mozambique
  • Namibia
  • Nauru
  • Navassa Island
  • Nepal
  • Netherlands
  • Netherlands Antilles
  • New Caledonia
  • New Zealand
  • Nicaragua
  • Niger
  • Nigeria
  • Niue
  • Norfolk Island
  • Northern Mariana Islands
  • Norway
  • Oman
  • Pakistan
  • Palau
  • Panama
  • Papua New Guinea
  • Paracel Islands
  • Paraguay
  • Peru
  • Philippines
  • Pitcairn Islands
  • Poland
  • Portugal
  • Puerto Rico
  • Qatar
  • Reunion
  • Romania
  • Russia
  • Rwanda
  • Saint Helena
  • Saint Kitts and Nevis
  • Saint Lucia
  • Saint Pierre and Miquelon
  • Saint Vincent and the Grenadines
  • Samoa
  • San Marino
  • Sao Tome and Principe
  • Saudi Arabia
  • Senegal
  • Serbia and Montenegro
  • Seychelles
  • Sierra Leone
  • Singapore
  • Slovakia
  • Slovenia
  • Solomon Islands
  • Somalia
  • South Africa
  • South Georgia and the South Sandwich Islands
  • Spain
  • Spratly Islands
  • Sri Lanka
  • Sudan
  • Suriname
  • Svalbard
  • Swaziland
  • Sweden
  • Switzerland
  • Syria
  • Taiwan
  • Tajikistan
  • Tanzania
  • Thailand
  • Timor-Leste
  • Togo
  • Tokelau
  • Tonga
  • Trinidad and Tobago
  • Tromelin Island
  • Tunisia
  • Turkey
  • Turkmenistan
  • Turks and Caicos Islands
  • Tuvalu
  • Uganda
  • Ukraine
  • United Arab Emirates
  • United Kingdom
  • United States
  • Uruguay
  • Uzbekistan
  • Vanuatu
  • Venezuela
  • Vietnam
  • Virgin Islands
  • Wake Island
  • Wallis and Futuna
  • West Bank
  • Western Sahara
  • Yemen
  • Zambia
  • Zimbabwe
Regulatory agencies
Regulatory documents (United States)
International cryptocurrency laws
  • Digital Asset Business Act of September 2018 (Bermuda)
Cryptocurrency legal instruments
Law firms specializing in cryptocurrency law

Timeline

March 17, 2022
Ukraine legalizes bitcoin and cryptocurrencies
February 21, 2022
Russian finance ministry submits bill on regulation of cryptocurrencies to government
September 24, 2021
China bans all cryptocurrency transactions and mining.
September 7, 2021
El Salvador accepts Bitcoin as legal tender, after months of protests. It is the first country in the world to do so.
May 18, 2021
China bans its financial institutions from providing any services related to cryptocurrency transactions.
September 2020
The European Union proposes a package of cryptocurrency regulations called Markets in Crypto-Assets, or MiCA.
February 6, 2018
The United States Committee on Banking, Housing, and Urban Affairs holds a hearing on virtual currencies and the role of the SEC and CFTC.
2015
The CFTC classifies virtual currencies as commodities.
April 21, 2014
Germany recognizes Bitcoin as currency, or "private money."

Further Resources

Title
Author
Link
Type
Date

Cryptocurrency Law

Web

October 6, 2018

ICLG.com interview with Scott Hardy of Top Class Actions

Web

September 23, 2021

NEW CRYPTO LAW - Explained

Web

November 15, 2021

New Crypto Law JUST Passed (seriously)

Web

November 17, 2021

References

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