Bitcoin Love: Are Bitcoin ATMs Legal?
You’ve been hearing about Bitcoin, and the impressive gains it’s provided for all your friends for years. But you still haven’t purchased any yourself? What’s up with that?
You’re probably unsure what cryptocurrency actually is, and you probably don’t know where to buy it, let alone how to store it.
One of the easiest ways for crypto newbies to get started, however, is by using Bitcoin ATMs. Everyone is familiar with making ATM withdrawals and deposits when using a cash ATM. And a Bitcoin ATM is basically the same thing, except you are getting something much more valuable than cash.
You’re getting the currency of the future, and the asset that has provided the biggest gains in the last decade, by a long shot.
So is it to obtain Bitcoin with an ATM withdrawal or deposit? Keep reading to understand Bitcoin ATM regulation now.
Are Bitcoin ATMs Regulated?
Bitcoin ATMs are popping up all over the country. There are currently thousands of Bitcoin ATMs in the US. So are they legal, and who regulates them if they are?
Bitcoin ATMs, along with any other type of ATM, need to follow both federal and state laws. This is because they are a financial service, which requires strict regulation in our nation.
On a federal level, this means registering with the Financial Crimes Enforcement Network. Should the authorities detect that users of a particular ATM or financial service are engaged in crime, such as money laundering, this act would require the company to work with enforcers to provide information in an effort to prevent crime.
The US takes money laundering very seriously, and financial service providers need to have an anti-money laundering (AML) compliance program in place. Part of this is an identification verification process referred to as “know your customer” or KYC.
Whether you purchase Bitcoin online, through a cryptocurrency exchange, or you make a Bitcoin ATM withdrawal, you need to complete a KYC process to verify your identity.
If an ATM or website isn’t requiring this then it might not be a legal operation in this country.
State Regulation for Bitcoin ATMs
Bitcoin ATMs also need to follow state regulations for financial services. ATM providers need a license in most states. This is especially true if your ATM is connected to a cryptocurrency exchange, which facilitates the transaction.
Not all Bitcoin ATMs operate through an online exchange. But either way, a state license is most likely needed.
Buy and Sell With Confidence
Bitcoin ATMs are not secrets. They cost quite a bit of money to create and prepare for use in public. And when they are out in public, you can bet that the governing authorities are aware of it.
It would be very difficult for scammers to produce an ATM, put it out in public, and facilitate transactions without being registered and licensed. It would get shut down immediately.
So if you find a Bitcoin ATM out in the wild, you can bet that it’s a legit operation and that it’s safe to use to buy and sell Bitcoin.
Byte Federal ATMs, are one of the most respected and secure Bitcoin ATM providers in the nation.
Is Cryptocurrency Legal?
One of the main things that set cryptocurrency apart from fiat currency and other financial assets is that they are decentralized. That means there is no single authority that backs up the currency, no one that can ban it or shut it down, and no one that can censor transactions.
In the US, the government is in charge of the US dollar. The US dollar has no value unless the government says that it has value.
And on a day-to-day basis, the dollar is controlled by the banks. You have to trust your bank to hold your dollars, and to release them when you want to spend them. Ultimately, they have control over your money and have been known to freeze accounts and prevent transactions when they feel they should.
That’s what can happen with centralized currency.
With Bitcoin and every other cryptocurrency, no one controls it. They can be purchased, stored, and held by anyone in any country in the world. They can also be transferred peer-to-peer without needing to use a bank as a middle man.
This decentralization is what makes cryptocurrency the money of the internet, and the money of the future. And it’s something that the government couldn’t technically ban, even if they wanted to.
It lives on the internet, and transactions are recorded by nodes across the planet. The only way a country could ban cryptocurrency is by banning the internet – just ask China. They’ve banned cryptocurrency more than a dozen times already.
So rather than banning cryptocurrency, many countries are trying to figure out how they can add some degree of regulation to the flow of cryptocurrency. This is an ongoing discussion that has been getting quite heated in 2023.
The government doesn’t like things outside of its control, especially money. But that’s precisely why crypto was invented in the first place. And it’s going to be around for a long, long time.
Buying Bitcoin the Right Way
Ready to make your first Bitcoin purchase? The only thing you need to do before visiting a Bitcoin ATM is setting up a wallet. This can either be a software wallet, which is a free app that you can download on your phone or computer, or it can be a hardware wallet.
Either way, you need to set it up and get your wallet’s public key, which is the virtual address where you will send your Bitcoin in order to store it securely. You’ll need to display this address, likely using a QR code, to the ATM so it knows where to send it.
Boom, now you have decentralized currency under your control, without having to trust a bank to hold it for you.
Choose a Reputable ATM Provider
Bitcoin ATMs have exploded in popularity, and we should expect to see more popping up all the time. So long as you choose a reputable provider, you can feel confident, knowing your purchase is safe and secure, particularly if you are using cash to exchange for Bitcoin.
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