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Crypto Regulations: What to Know

Crypto Regulations

Cryptocurrency has steadily grown in popularity around the world. Though not yet on the scale of mass adoption, more and more people are joining the ranks of crypto traders every day, to the point that investing in crypto and trading crypto respectively is now one of the most profitable ventures. In response, countries have begun to implement crypto regulations as a check against undue practices.

Crypto regulations may differ among countries depending on several factors, such as how widespread cryptocurrency is in the nation and if it is viewed as a legal tender. Several countries are notable for their lenient crypto regulations and are a favorite among traders. Others might not have clearly defined crypto laws and are seen as a grey area. Others still are known to have stringent crypto laws that restrict the practice.

Nonetheless, crypto regulations are a relatively new endeavor, and since most traders are unaware of their existence they inadvertently go against them. Crypto traders are urged to take an active interest in keeping abreast of the specific guidelines in their respective country as well as  crypto regulations globally.

What are Crypto Regulations?

The cryptocurrency landscape is constantly growing and becoming more mainstream throughout the world. Just consider the recent interest spike in NFTs. With its rise, many people are calling for specific regulations to provide a sense of certainty and official guidance about the ideal practices to which traders should adhere. Unfortunately, thus far, the ambiguous nature of cryptocurrency and its lack of a clear definition has made this difficult. Recently, countries have been acknowledging this need within the industry and viewing the challenge as an opportunity to progress.

Crypto regulation differs across countries depending on the level of adoption by the masses and whether they are seen as legal tender. Though laws are constantly in flux as governments scramble to keep up with digital currencies, crypto procedures generally cover aspects such as payments, investments, derivatives, and taxes.

Can Crypto be Regulated?

Cryptocurrencies are digital assets, but remain difficult to define and therefore difficult to regulate. Another problem is that digital currencies are made to be decentralized and distributed. Since digital currencies can exist in different locations, no one body can ‘own’ them. Thus, it’s very difficult for a government to legislate against them and impose laws.

That being said, there are still ways for governments to regulate digital assets. A case in point is the hold governments have on ICOs (i.e., initial coin offerings). ICOs are a popular fundraising technique used by companies looking to create a new digital coin or app. Investors can buy into an ICO to receive a virtual token normally related to the company’s product or the company itself. Though previously unregulated, some governments have now established ICOs as “securities.” This mandates their development and uses to comply with the country’s security laws.

Another way governments regulate crypto is by imposing a tax whenever crypto is arbitraged or traded for either real cash, a product, or a service. While buying and holding cryptocurrency by itself isn’t taxable if the digital currency increases in value, if you own and sell it or otherwise profit from its trade, then you are mandated to pay a tax on it.

Crypto Tax Regulations

At the moment, though, crypto tax policies vary greatly across the globe, with some nations being more lenient than others in their regulatory approach, depending on their view. Such a diversity and a dynamically changing crypto tax regulation landscape made crypto tax automation software an essential tool for all casual and tax-conscious users.

So, how is crypto taxed around the world?

  1. USA: In the US, cryptocurrency is viewed as a capital asset. It draws either a 0% – 37% short-term capital gains tax or 0% – 15% long-term capital gains tax depending on how long you held the digital currency before selling or trading.
  2. Canada: In Canada, crypto is taxed as either income or capital gain. The 15% – 33% income tax is only levied if it is determined that you’re earning an income from specific crypto transactions.
  3. Greece: Greece imposes a 15% tax on capital gains gotten from crypto transactions, which can be mostly seen as a low tax when compared to other countries.
  4. Australia: In Australia cryptocurrencies have been recognized legal since 2017. It is to be treated as property, thus it is a subject to Capital Gains Tax, which varies from 19% to 45% depending on your tax bracket.
  5. United Kingdom: In the UK, income generated from crypto investments is taxed. Cryptocurrencies obtained from mining are also taxed, as are digital currencies that are received as a salary from a job.

Tax Regulations on Crypto Mining

Crypto mining is how Bitcoin and other digital currencies are generated. Generally, it involves several decentralized networks that work together to verify and safeguard the blockchains responsible for recording crypto.

Miners contribute their processing power to generate new cryptocurrency coins, which then belong to the miner—basically as a reward for their role in mining a block of the cryptocurrency. In most countries, this added currency is subject to tax.

Cryptocurrencies obtained through mining are treated differently from capital gains and are seen as income. In this way, they are subject to income tax, which must be filed and paid. This rule stands whether or not the individual is a hobby miner or engages in crypto mining as a business—though there are different procedures for both.


Cryptocurrencies have undergone such a massive surge in recent times that most countries have been forced to develop rules and regulations to supervise crypto activities within their borders. Though most of these laws are under a constant state of refinement, it’s key that individuals involved in cryptocurrencies are always kept up-to-date and avoid unsanctioned practices while trading.

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