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What are the Laws for Cryptocurrency?

By 
The Crypster
What are the Laws for Cryptocurrency?
Are you interested in investing in cryptocurrencies? You must be aware of the laws and regulations before proceeding any further.
New to CoinSmart Avalanche and Polygon

Though a consistent legal approach can't be found at the state level, the United States continues to develop federal-level cryptocurrency legislation.

The Financial Crimes Enforcement Network doesn’t consider cryptocurrencies as legal tender. However, it deems cryptocurrency exchanges to be money transmitters on the condition that cryptocurrency tokens are other value substituting for currency.  

Moreover, the Internal Revenue Service defined cryptocurrency as a digital representation of value functioning as a medium of exchange.

Government Attitude

Many state governments have passed and/or proposed laws on blockchain technology and cryptocurrency transactions. Most of the activity is taking place in the legislative branch. Some states attempted to promote the technology through favorable regulations that exempted cryptocurrencies from state securities laws.

Sales Regulation

Generally, the cryptocurrency sale is only regulated if the sale is considered money transmission in terms of state law or constitutes the sale of a security in state or Federal law. In addition, derivative contracts referring to the cryptocurrency that constitutes a commodity are liable to regulation by CFTC, based on the Commodity Exchange Act.

Moreover, the CFTC has jurisdiction over attempts to engage in market manipulation associated with those cryptocurrencies considered commodities.

The possibility of the CFTC declaring its authority to prevent market manipulation is a lot higher today because of both the CME and the CBOE offering futures related to the price of Bitcoin.  

Securities Laws

The U.S. Securities and Exchange Commission has regulatory authority over the resale or issuance of any digital asset constituting security. According to U.S. law, security comprises an investment contract. The U.S. Supreme Court defines the contract as an investment in a common enterprise that offers profits to be derived from managerial or entrepreneurial efforts.  

To determine whether the cryptocurrency is an investment contract, the courts and SEC review the substance of the transaction, rather than its form.

At Urban Crypto, you can now learn to buy, sell and exchange crypto safely to excel in the world of cryptocurrency.    

You can read simplified crypto and Bitcoin guides on our website to get started with Coinbase. Moreover, our online platform and the highly-qualified team help you make money online with Bitcoin.

You can also go through the crypto news and industry info and beginner's guide to buying cryptocurrency to begin your Bitcoin journey! Visit our website to get all the Bitcoin tax questions answered!

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