Before You Invest: What to Know About Crypto Regulations

According to one study, about 14% of people currently have some kind of cryptocurrency investment.

If you’re one of those people who have a stake in crypto, you should make sure that you understand all of the crypto regulations surrounding it. 

Thankfully, we’re here to help you out. Keep reading to learn all you need to know about crypto regulation. 

Current Regulation in the United States

Since crypto has become popular, Congress has introduced about twenty bills. Two of them were introduced to make the U.S. a bigger part of the crypto market. There were also two bills in 2019 that hoped to regulate it and help the United States benefit. 

However, when it comes to SEC crypto regulation, they view cryptocurrency as a security. By doing that, they hope to apply the same security laws to the whole industry. This would mean that it would affect the wallet companies and the ICOs. 

They’re working on releasing new guidelines as well, but these guidelines won’t be the law yet. 

The Commodity Futures Trading Commission (CFTC) also has regulations, especially when it comes to Ether. Ether is the crypto that is second-most traded, so they consider it a commodity. That means that it can be traded on the markets in the United States. 

If you’re interested in learning more about that cryptocurrency, click here to read more about Ethereum.

Future Regulations

In the future, the U.S. government will likely make more decisions and laws to help regulate the industry.  As crypto becomes more popular, unfortunately, the government will probably try and make it difficult to invest and earn money in crypto.

The technology is complicated, so there are many factors to consider when you’re wondering to invest. However, the technology is changing so much that the policies also won’t be applicable as soon as they’re written. This might mean that some legislation may not even be applicable in the future. 

One of the main reasons that they’re delaying any regulations is because the SEC and the CFTC can step in if something going on is illegal. Plus, most of the laws in specific states help to limit some of the illegal transmissions of money, even for Bitcoin. 

One of the main things that need to be determined is whether a cryptocurrency is classified as a commodity and security. 

Gray Areas

There are also two main gray areas that don’t have regulations around them. 

That includes the taxation reporting and the Initial Coin Offerings (ICOs). Some reports have suggested that people underreported how much they actually made from their capital gains. 

The IRS wants to gain as much money as they can, so they’ve started to collect more cryptocurrency and look at a user’s activity logs. But there are still legal loopholes in ways that you could avoid reporting your crypto. However, the IRS could find it before you report it. 

When it comes to ICOs, the cyrpocurrency is treated as security, which means that the cyrpto should be under security regulation. However, the SEC has been trying to play catch up to enforce this.


Currently, the IRS classifies cryptocurrency as a property or an asset. Because of that, if you make any money, you’ll have to pay a capital gains tax. 

The gains aren’t legal tender in any of the United Stttes. However, the Missouri House of Representatives started a bill in March to hopefully try and change that in their state. 

Investors could also have a tax liability against your gains. That means you could owe caital gains tax when you make profits on your cpypto. If you do have crypto, make sure that you hire a tax agent to help you file your taxes.

How Regulations Affect You

So how do these regulations affect you if you’re in the United States? You can still sell, buy, and even send crypto on different apps and accounts. However, some of them have limits on how much money you can send or withdraw.

You may even have to verify your identity.

However, if you wanted to invest in ICOs, you may not be able to as a U.S. citizen. Some of them are banned, but you may be able to get some if you’re an accredited investor. 

Should You Invest?

Investing in cryptocurrency can be very appealing, but you shouldn’t dump your lifesaving into it. Crypto is very volatile, so there is a lot of risk involved.

If you’re new to investing, you shouldn’t invest in crypto. If you’ve had some experience, are okay with potentially losing your money, or like the risk, you may want to invest in crypto. 

There is a higher risk when all of crypto isn’t regulated properly, especially because you aren’t sure how the future regulations will affect your gains. Crypto may be taxed even more so that it wouldn’t even be worth it to invest in. 

Plus, since there isn’t much regulation, cybercrime and hacks have been prevalent in the industry. 

Learn More About Crypto Regulations

These are only a few of the crypto regulations that you should keep in mind, but there are many more things to be aware of.

We know that investing in crpyotcurrency can be stressful and overwhelming, but you don’t have to figure it out all on your own. We’re here to help you out.

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