Is Bitcoin Mining Illegal?

Bitcoin mining has now developed into a lucrative business globally. Provided you live in a country with acceptable electricity costs or you can somehow generate the energy yourself cheaply. Most of Bitcoin mining is done in China because electricity costs and infrastructure are cheap there.

Due to the waste of energy in Bitcoin, there are repeated discussions about the usefulness of mining. China has considered banning Bitcoin and Bitcoin mining several times. So far, however, it has never been passed by law. Countries in which Bitcoin and Bitcoin mining are partially or completely prohibited are Morocco, Algeria, Nepal, Bangladesh, Kyrgyzstan, Paraguay, and Ecuador.

Germany and Bitcoin Mining

Bitcoin mining is generally allowed in Germany. However, it is a legal gray area. To be on the safe side, you should register a business first. At the moment, however, you don’t have to worry about it, unless you have your own power plant. Bitcoin mining is not profitable at the current electricity prices in Germany. If you still want to try, you will likely incur losses.

The United States and Bitcoin Mining

Under federal law, Bitcoin and most cryptocurrencies are defined as commodities. However, activities related to Bitcoin varies within the US. Bitcoin mining is legal in the US as it is classified as a commodity in September 2015. The IRS considers Bitcoin as a property and holders do need to pay taxes on it.

Anyone in the US that has to do a substantial amount of business in the U.S. with cryptocurrencies must register with the FinCEN as a money services business, enforce AML policies and keep all the appropriate records necessary.

Bitcoin is also legal in Canada and Mexico, however, there is a banking ban currently standing in Canada since 2018.

Bitcoin Mining
Bitcoin Mining© Cryptoticker
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