Is cryptocurrency legit? Do you want to know its status? Then, this blog is for you. However, the legality of cryptocurrency was always a controversial debate. So before investing in crypto, know what makes it different from cash & other payments. The main purpose of this virtual money is to be used as anonymous payments by introducing the concept of decentralized finance to the world.
However, this virtual currency isn’t sponsored by any government body. Even so, you can use crypto to purchase goods and trade them for US dollars and other conventional currencies on digital markets. But, as it is not a government-backed currency, the value of virtual currencies is driven completely by supply & demand. That can make a wild swing that generates big gains or big losses for investors.
Cryptocurrencies like Bitcoin, Ethereum, and others are best in online trading, and it’s possible for clever investors to make a huge return. But sometimes, the greediness of getting rich quickly blind people to the risks and lure them into scams. And in recent years, FTC has gotten more complaints of crypto investment scams. So be careful while making investments & research thoroughly about the firm.
Globally, people & authorities are still confused about how to control it, and many people think if they can use Cryptocurrencies legally or not. Let’s move ahead to look at some legal issues related to Cryptocurrencies.
About Cryptocurrency
All Cryptocurrencies are totally digital, with no physical product. Bitcoin, the first commonly used crypto, was launched in 2009. It is basically a peer-to-peer payment system; though some companies accept certain cryptocoins as payments as well & some do not. Cryptocurrency doesn’t depend on banks to process transactions or other authoritative government bodies. Nowadays, more & more brands and firms are adding Cryptocurrencies such as PayPal offers crypto and Master card plans to bring crypto into the payment method.
Moreover, this virtual currency is used as a medium of exchange, but it’s seen mainly as an investment for most. It is decentralized and not handled by any government authorities or banks, and Blockchain technology keeps the transactions safe & anonymous.
Regardless of the growing popularity, there are some consumer regulations & protections for cryptocoins. Generally, the commodities futures exchange commission (CFTC) controls the trading of crypto futures and spot markets, whereas (SEC) monitors emerging cryptocurrency, including (ICO’s) initial coin offerings. However, the legal status of crypto coins differs largely from region to region.
Is Crypto Safe?
Crypto is a safe form of payment that can be easily transferred from one party to another without needing a centralized monetary system like a bank. Hence, cryptocoins transactions are protected & secured by blockchain.
Hence, every type of investment is risky, but with crypto, you will come across different and unique risks you must be aware of. The most common risk of crypto includes its lack of regulation with authorities, rampant scams, and volatility. As crypto has been around for almost a decade, it’s still quite new in the world of payments, and it is not insured and is illegal in some parts of the world.
We all are aware that the prices of cryptocoins are typically volatile. And experts suggest that you should only invest the money you can afford to lose. So, when investing in cryptocurrency, you have to take steps to ensure your security. However, blockchain can help secure users from anyone interfering with their data; it also helps stop identity theft and secure infrastructure.
The other safety problem with crypto is that any federal or government bodies don’t insure it. So if you are scammed, you have no resources to recover your investment. People think it is the biggest asset, but if any government tries to attack crypto, it could crash.
Pros & Cons of Cryptocurrency
Let’s discuss some of the opinions of investors and why they believe it is a good choice for investment while others worry it’s a fad. First, discuss the pros of crypto. However, people see crypto, such as Bitcoins, as the future currency and are chasing to purchase it before it becomes more valuable. Hence, the majority likes the fact that crypto eliminates central banks from handling the money supply since, over time, these banks tend to decrease the value of money. It is believed that people see cryptocoins as a talented foothold due to their decentralized processing recording system.
However, some cons include that many crypto projects are unproven, and blockchain tech generally has to gain ample adoption. If the underlying idea behind crypto does not accomplish its potential, then long-term investors may never see the returns they expected. Whereas for short-term crypto investors, there are other issues; its prices tend to volatile rapidly, which means you have to buy the coins at the right time. Otherwise, you lose money. Lastly, governments have not completely think how to manage cryptocurrency, so these authorities have the potential to affect the market in impulsive ways.
| Pros | Cons |
| Fast Transactions | Transaction Fees |
| Secure Payment method | Price Volatility |
| Investment Growth | Not Regulated |
| 24/7 Availability | Not Reversible |
| Anonymity | Risk of Loss |
| Pay from anywhere | Crypto Scams |
Cryptocurrency Adoption
Cryptocurrencies & blockchains are growing powerful regardless of the risks. Professional and individual investors are slowly getting the tools they need to manage & preserve their crypto assets. Now, many companies are gaining direct experience in the crypto sector. Financial giants like Block and PayPal are making it simple to purchase and sell crypto on their well-known platforms.
Despite its riskiness, the growing pace of crypto adoption shows a maturing industry. Hence, vast enterprises seek to gain direct experience with crypto, considering it safe enough to invest huge amounts of money.
Countries Where Cryptocurrency is Legal, Illegal, or Restricted
Cryptocurrencies are not handled or supported by any private or public authorities. That’s why it has been quite challenging to make a case for their legal status in multiple financial jurisdictions worldwide. Here we will mention all the top countries’ status of crypto. So have a look.
| Countries | Crypto Status |
| Algeria | illegal |
| Bolivia | illegal |
| China | Illegal/ Absolute Ban |
| Egypt | illegal |
| Vietnam | Illegal as a payment tool/ legal to trade & hold |
| Maldives | illegal |
| European Union | legal |
| US (United States) | legal |
| Canada | Legal |
| Australia | Legal |
| Denmark | legal |
| France | legal |
| Germany | legal |
| Iceland | legal |
| Japan | legal |
| UK (United Kingdom) | legal |
| Spain | legal |
| Mexico | legal |
| New Zealand | Legal |
| Portugal | Legal |
| Italy | Legal |
| Russia | Legal to mine/ banking ban |
| Switzerland | Legal |
| UAE | Legal/Banking ban |
Final Words: Is Cryptocurrency Legit?
Cryptocurrency is legitimate because it is a digital currency, and you can use it to buy goods and services, and most people use it for investment. It is a decentralized currency with a secure payment method, and it does not support by any government body. But, nowadays, many crypto scams are reported, so always be cautious while investing and protect yourself from such scams.
However, crypto fans praise it all the time, but no government in the world accepts it as a legitimate currency as it’s too volatile, and there is no guarantee when its value will go high or low. Hence, it’s never been easy to invest in crypto as it still has so many risks. You have no legal platform to compensate for the loss if you are scammed.
