Is Bitcoin Legal?

100% Yes, Bitcoin is legal to own. No one has ever been arrested in the United States for owning Bitcoin. Buying and holding Bitcoin is what people actually do with the currency and this is fine.

There is a lot of information on the Internet regarding this subject but I think there are two examples that really show that Bitcoin has to be viewed as legal.

Example #1: Government Regulations

IRS: Internal Revenue Service.

The IRS has declared that Bitcoin is property. They have established guidelines that need to be followed when dealing with Bitcoin and especially when selling it. If you sell a bunch of Bitcoin and made a profit from it, expect to pay taxes on that profit just as you would if you bought and sold a house.

MSB: Money Service Business.

State financial regulators have undertaken efforts at bringing virtual currency service providers under the existing legal framework of money services business. These MSB's need to be licensed in 47 of the 50 states.

BitLicense:

New York which is the headquarters of finance in the country has created the basis for how to get a legal license to operate a crypto currency business. This so called BitLicense has been granted to two companies Circle and Ripple.

If the government is coming with regulations that I feel like it's safe to say we have a fully legal product on our hands.

Example #2: Silk Road seizure.

In late 2013 Federal Law Enforcement indicted Ross Ulbricht for running a sort of drug Ebay called Silk Road. Mr. Ulbricht never actually sold any drugs, but he setup the website where you could post your drugs and others could buy them. Like Ebay he took a tiny percentage of every sale.

When they caught Mr. Ulbricht, they were also able to obtain over 144,000 Bitcoins. If they have confiscated bricks of cocaine, or rocket launchers, or child porn, I think everyone would agree they would have kept this for evidence and then disposed of this eventually or let it sit in the evidence room for all time.

This is where I think the legality question in the United States is answered. The Bitcoin was not viewed as something nefarious and illegal but was viewed as property taken. Just as if they had seized houses and cars from Mr. Ulbricht, they wanted to make use of the assets taken. Following a conviction verdict and a life sentence for Ross Ulbricht, the US Marshall Service held an action for this Bitcoin and sold it off to the general public.

The Silk Road Bitcoin sale set an important precedent that the federal government will treat Bitcoin as a legit legal asset that can be bought and sold as they have shown us with their example.

Complete Disclaimer

I am not a lawyer. The above is totally my own opinion. You are free to agree or disagree with this as you see fit. This is just be being logical and making observations based on my own experiences. Please get a lawyer if you want professional advice.