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Bitcoin and the Law: What You Need to Know about Cryptocurrency

In late 2017, Bitcoin surged to almost $20,000, hitting $19,783.06 on December 17th. The meteoric rise came with just as sudden of a crash and is currently hovering around $11,000. This new trend has caused a lot of excitement, but not a lot of people totally understand it.

That is where we can help. The Berman Law Group has the legal experts you need to help you with a whole host of problems. As Florida corporate lawyers, we want to assist you in understanding Bitcoin and the law.

Is Bitcoin Legal?

To directly answer the question: yes, it is legal to buy, sell, and own Bitcoin. A wide range of other currencies, such as Ethereum, Litecoin, and Ripple, are also legal. Simply collecting Bitcoin will not get you into trouble with the law.

According to the IRS, cryptocurrencies such as Bitcoin will be treated as property. Some wanted Bitcoin futures to be traded on the stock market, but the Securities Exchange Commission and the Commodities Futures Trading Commission do not appear to share the excitement. They have put out a joint statement demanding answers before they allow cryptocurrencies to really move onto the market.

In Florida, our Senate passed House Bill 1379, which defines what a cryptocurrency is. It is now considered a ‘monetary instrument’, similar to travelers’ checks or money orders.

Other Legal Considerations

Florida House Bill 1379 also stated that virtual currencies cannot be used to commit money laundering or other white-collar crimes. This has been a major concern with cryptocurrencies. FinCEN, or the Financial Crimes Enforcement Network, issued several warnings about virtual money, and how it can be used for money laundering and financing terrorism.

One of the biggest reasons that many forms of virtual currency have become so popular is that it is incredibly hard to trace. That makes it appealing to people who do not follow the law. Bitcoin has been used by drug dealers and money launderers. Recently, a currency exchange was fined $110 Million for facilitating ransomware and dark net drug sales.

If it is illegal to do with American dollars, it is illegal to do with Bitcoin, Litecoin, or Ethereum. That means that if you purchase drugs, defraud people, or commit any other crimes, you run the risk of going to jail.

Bitconnect, one of the largest Bitcoin exchanges, was forced to shut down its platform due to the fact that it was essentially a Ponzi scheme. If you have invested in any of these, it may be prudent to make sure that you know where your money is going, and how it is being kept.

Certain companies, like MicrosoftOverstock, and Dish Network, accept cryptocurrencies as payment. You should know, however, that companies are not required to accept something like Bitcoin. When you buy a pizza or paper towels, for instance, neither the restaurant nor the grocery store has to take your virtual currency. They can request a credit card or cash.

If you have any questions about white collar crime, call us today. We can be your Florida corporate lawyers. The Berman Law Group has an experienced legal team who are helpful, honorable, and hungry to win your case. Contact us now.