Is Crypto Mining Legal?

It might seem strange to think of something so virtual as cryptocurrency as having real-world consequences, but the answer is that it does. Bitcoin mining is illegal in some places, while other countries take a lax view of cryptocurrencies. In many cases, it's unclear what the future may hold for mining operations around the world.

Some countries have taken steps to limit bitcoin mining or outright ban it — such as China and South Korea. The United States hasn't taken any formal action on the legality of mining, but some states have begun regulating the industry at the state level.

The U.S. Federal Government's Position on Mining

The United States has no formal laws against bitcoin mining or prohibiting citizens from participating in cryptocurrency transactions. However, some states have adopted stricter measures against cryptocurrencies in general and bitcoin mining in particular; New York is one example of this trend.

In particular, New York state regulations require "any entity seeking to engage in virtual currency business activity in or involving New York or a New York resident" to get a "BitLicense" from the state's Department of Financial Services. The application process for BitLicenses is expensive and onerous, with an application fee of $5,000 and an annual fee of $1,000. 

Countries Banning Crypto

The research revealed that the number of countries banning crypto has increased significantly since it first appeared in 2018. Nine countries currently have an absolute ban that makes crypto illegal.

According to the report, Algeria, Bangladesh, China, Egypt, Iraq, Morocco, Nepal, Qatar, and Tunisia are among the countries that ban crypto. China, the world's second-largest economy, slammed the crypto markets with its restriction earlier this year.

China is going so far as to make "the production or sale of equipment used to anonymously access virtual currency" a crime punishable by up to 15 days in detention, according to the new regulations. "Anonymous access" refers to using VPNs or other technologies to get around the country's internet restrictions and access banned content online.