Cryptocurrencies: Not considered legal tender
Cryptocurrency exchanges: Legal, regulation varies by state
It’s hard to find a consistent legal approach to cryptocurrencies in the United States. Laws governing exchanges vary by state, and federal authorities actually differ in their definition of the term ‘cryptocurrency’. The Financial Crimes Enforcement Network (FinCEN) doesn’t consider cryptocurrencies to be legal tender but since 2013 has considered exchanges as money transmitters (subject to their jurisdiction) on the basis that tokens are “other value that substitutes for currency”. The IRS, by contrast, regards cryptocurrencies as property – and has issued tax guidance accordingly.
Cryptocurrency Exchange Regulations
Cryptocurrency exchange regulations in the United States are also in an uncertain legal territory, and several of the federal regulators claim jurisdiction. Of the major US regulatory bodies, the Securities and Exchange Commission (SEC) has indicated that it considers cryptocurrencies to be securities: in March 2018 it stated that it was looking to apply securities laws comprehensively for digital wallets and exchanges. By contrast, The Commodities Futures Trading Commission (CFTC) has adopted a friendlier, “do no harm” approach, describing bitcoin as a commodity and allowing cryptocurrency derivatives to trade publicly.
Future Cryptocurrency Regulations
The Justice Department is coordinating with the SEC and CFTC over future cryptocurrency regulations to ensure effective consumer protection and more streamlined regulatory oversight. The US Treasury has emphasized an urgent need for crypto regulations to combat global and domestic criminal activities and, in January 2018, Treasury Secretary, Steve Mnuchin, announced a new FSOC working group to explore the increasingly crowded cryptocurrency marketplace.