Is Coinbase Legal?

Is Bitcoin mining illegal?

In the majority of cases, Bitcoin mining is legal. In some countries, Bitcoin mining as well as owning and using bitcoins is considered illegal. If you like in North America and bigger part of Western Europe, then Bitcoin mining as well as ownership are not legal and also protected by local regulatory frameworks.

In most cases, Bitcoin is not considered as currency by governments but as asset or property. So, Bitcoin received some legal protection as any other property. In most cases, national governments that have not outlawed Bitcoin did not pass laws that are connected to Bitcoin mining. In a bigger picture with a few exceptions, mining is legal.

Before you start studying legal issues, we decided to write a short review about Bitcoin mining.

What is Bitcoin mining in general?

Bitcoin mining is the process of adding payments records to a public ledger. Every single transaction that has ever been conducted gets added to a public ledger, however, actual users are left hidden behind anonymous names. This ledger is called a block chain and all payments are organized in blocks.

The process of mining refers to the creation of new blocks of transactions. After creating a new block t gets added to a block chain – a public ledger AKA. This block is created through solving algorithms with computer processors.

After some time algorithms become more difficult which means for creating one block it is needed more computing power. Also, every four years the number of bitcoins that were given for a reward when a new block was found half. At first, for a new block was given 50 bitcoins, then 25, and now this number reaches only 12,5. This makes mining more complicated restricts the Bitcoin money supply. Soon, this process will lead to Bitcoin price increase.

Actually, every processor can be used for mining bitcoins, however, without a powerful processor, you will not be able to see good results. Nowadays, there are special machines that are called mining rigs. These rigs were created especially for mining new bitcoins or for solving algorithms that are needed for creating a new block. To make mining cost-effective, it is important for rigs to require as much energy as possible, therefore, algorithms will be solved quicker.

What are the reasons for Bitcoin mining to be illegal?

Mining is a difficult process, therefore, the reasons can be different, for example, they can refer to jurisdiction. Sometimes people think that Bitcoin mining is just a process of counterfeiting money, however, it is not true at all. It is not about counterfeiting money but this is the process of creating a new currency.

Some governments are against Bitcoin and its mining. Some of them consider Bitcoin mining as a threat because this new currency competes with national currencies. They say that Bitcoin undermines the government itself by offering a non-state currency.

Bitcoin can also be mined illegally. For example, to do it you can use malicious viruses for hijacking people’s computers and then use their processors for mining bitcoins. This can slow down computer’s work and also run up energy bills. This is illegal and it is mentioned in every jurisdiction.
Where is Bitcoin mining considered illegal?

Bitcoin mining, as well as possession and use, are considered illegal in several countries. In other countries, mining and using bitcoins is ambiguous because the government does not forbid it as well as does not warn people about its danger.

At the moment, Bitcoin is forbidden in Russia, however, the recent legislation that bans Bitcoin mining and using was withdrawn. The reason for the withdrawal seems less about outlawing Bitcoin, and more over the extent of punishment. Some of the Russian authorities want people who use Bitcoin to face multi-year sentences in jail. Some are not so harsh. The legal status regarding Bitcoin mining is not set 100% because actual laws are not established. Still, mining in Russia provides a very high risk.

Russia is the only one country that is so against Bitcoins. Of course, this country is well-known as authoritarian. Also, Russia has a fight for the economic crisis that was caused by low prices, as well as sanctions instituted because of their activities in Ukraine. To make Bitcoin forbidden is the country can also relate to efforts that were made to protect the ruble – national currency that was suffering from massive inflation for the last few years.

For example, in Ecuador (South America) it is forbidden to make cryptocurrencies, however, they created their own cryptocurrency.The electronic currency is connected to USD (which is a national currency in South America) and designed to reduce dependence on physical money, such as wear and tear of the bills themselves. Ecuador does not want other electronic currencies, such as bitcoin, to compete with their own.

The reasons to forbid Bitcoin are not always authoritarian. For example, Iceland does not allow to trade local kroner for bitcoins. The Icelandic economy has been fighting during the Great Recession and the authorities started controlling the movement of funds to protect the kroner. The authorities worried about people flee the kroner which will affect the currency. Still, Iceland does not forbid Bitcoin mining.

Indian authorities have expressed their negative attitude towards Bitcoin, however, they did not prohibit mining it. At the moment, Bitcoin mining is the mentioned countries is legal and safe, however, it can change anytime.

Legal Bitcoin mining

The majority of countries accept Bitcoin mining. Of course, there are different ways of Bitcoin mining which mean that you will have to use your own resources, such as electricity and power. On the other hand, there are illegal ways of Bitcoin mining, for example stealing those resources. In this case, Bitcoin mining is called illegal because you steal.

Also, prosecutors in such countries as the USA and South Korea explained that they will follow those people who conduct illegal Bitcoin mining and using. It should not surprise you as long as everyone who uses Bitcoin should do it legal.


Bitcoin mining is legal. Even those countries that want to regulate mining and using bitcoins still consider the process legal. A lot of countries, including the majority of African countries have not accepted any laws about Bitcoin and even have not reviewed it. It is important to keep up with Bitcoin news and check where mining and using this cryptocurrency is legal and where prohibited. Even those countries that accept Bitcoin can change their rules and laws anytime. Therefore, it is significant to stay up to date if you are interested in mining and using bitcoins.