What are the laws related to cryptocurrencies?

What is Cryptocurrency?

Cryptocurrency is a virtual currency that can be used for payments and other financial transactions. Bitcoin, which many consider to be one of the most famous cryptocurrencies, was launched in 2009. Today, there are over 4,400 cryptocurrencies available in the market. Nonetheless, Bitcoin remains the most well-known by a margin of up to five times its closest competitor.

Current and Proposed Regulations for Cryptocurrencies

Currently, in the United States, cryptocurrency laws are primarily proposed and are based on the Bank Secrecy Act of 1970 and the Patriot Act. The Bank Secrecy Act requires U.S. institutions to assist in detecting and preventing money laundering and terrorist financing.

Legal Concerns Related to the Use of Cryptocurrencies

In 2020, a report from the Digital Cybersecurity Working Group on behalf of the U.S. Attorney General highlighted three areas of concern regarding the use of cryptocurrencies: the direct use of cryptocurrencies to commit crimes and finance terrorism, the use of cryptocurrencies for money laundering and tax evasion, and the theft of cryptocurrencies and investment fraud.

Caution Against Investing in Cryptocurrencies

Cryptocurrencies possess the same features that make them attractive, which are the reasons why people need to exercise caution when investing in them. The anonymous nature of transactions can make cryptocurrency exchanges a target for hackers due to the difficulty of tracing and recovering Bitcoin if it is stolen.

Source: https://www.thebalancemoney.com/what-are-the-laws-for-cryptocurrency-5121102