While I am guessing that, as most anyone can create a crypto and sell it or accept it as a form of payment, that it would be legal to give crypto as a form of payment (as bitcoin originally did with the Pizzas). However with SEC (or possibly some other government body) wanting to regulate and/or tax cryptos I wonder, am I allowed to give crypto as a form of payment without some sort of registering it with a government agency? I have not found any laws prohibiting it and can only find info about registering ICOs with SEC (in the US). Any thoughts?
1 Answer
If you agree to buy your neighbour's old lawnmower using buttons and lint as payment, the SEC don't want or need to know about your novel form of payment.
The same generally applies to other forms of payment.
Generally where a taxable event occurs, you have to work out the equivalent amount in some government approved currency. For example, if the price of lint skyrockets and your US neighbour sells her lint stockpile for huge profits, she'll probably have to work out the dollar equivalent and pay some sort of capital gains tax. But this is different from registering lint as a currency - you don't have to do that.
Where government agencies mostly like to be involved is when you are setting up some sort of financial institution or money handling business like a payment processor. The creation of BItcoin did not involve the creation of any financial institutions or money handling businesses. In fact it was designed to do away with that sort of third-party that needs to be trusted. Such institutions may have crept in and taken over a lot of Bitcoin usage but that does not mean the SEC are after Nakamoto to register Bitcoin. If Nakamoto had needed to register Bitcoin in 195 countries beforehand, it would never have got started. Ditto any cryptocurrency or lint-based system invented today.
Of course all this depends greatly on jurisdiction. The rules in Burkina Faso may differ from those in Ecuador.
answered May 13, 2021 at 8:45
