Is gambling with the crypto currency illegal?

Bitcoins have long become a trend among investors. Crypto currencies such as these as well as ripple or ether are results of computational processes and complex encryption algorithms generated by the users themselves.

But not everyone is familiar with the virtual currencies. The question often arises as to whether Bitcoins & Co. are legally risk-free at all – crypto currency illegal? We will address this question for you and take a legal look at virtual currencies. Bitcoins & Co.: Illegal means of payment and forbidden currency against the law? Is it allowed to gamle with BTC?

What are crypto currencies?

There is one thing behind crypto currencies: independence from the classical banking system. Until the creation of Bitcoins & Co., only the means of payment was considered “genuine”, which was usually circulated and reproduced by the state bank. Virtual currencies such as Bitcoins are generated in a decentralized manner and are not subject to the control of a state bank. Here, the influence of individuals is eliminated by the generation and control of a whole. A worldwide community of users ensures that the currency exchange ( )and every transaction is archived and made public.

Mining: Crypto currencies as a popular investment object

In order to create a new unit of Bitcoins and others, a multi-encrypted code must be decrypted. By keeping the “password-protected” currency artificially short and preventing inflation, a more complex code is generated when a certain number of currency units are reached.

Specially equipped mining farms constantly generate new codes, record transactions in the user network and check them for correctness. These are farms with a large number of computers that are only used for mining (“mining”).

Buying crypto currency

Bitcoins & Co. as crypto currency are also subject to the free market. This means that there are also platforms for virtual money that trade with a wide variety of means of payment. The purchase of the crypto currency is made possible by the corresponding payment centre, the so-called “wallet“. This gives you the right to dispose of amounts within the network. As a rule Bitcoins, Ethereum (short: Ether) and other digital money can be purchased by exchanging. The payment is made here by SEPA, Giropay or Sofortüberweisung of a certain amount, in order to receive the corresponding equivalent in crypto currency.

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Bitcoins, Ether, Dash or Pivx: Secure investment or legally questionable?

First of all, the crypto currency itself, whether Bitcoin, Dash or Ether, is not a matter under civil law and furthermore not a right, but a forgery-proof electronically transferable data record with coding. Different participation networks assign different values to it. Under civil law it is sometimes difficult to categorise data.

It is currently also unclear according to which legal rules the currency units are traded and transferred. Even in the event of a hacker attack or identity theft, for example, it is legally undefined how a reverse transaction could take place here. However, if coins and units are exchanged for services, contractual rights such as offline exist.

Although it is not legally clear what Bitcoins & Co. are, we know what they are not: Crypto currencies are neither legal tender nor securities (despite electronic transmission). They are also not “e-money”, as they do not have an official publisher, but are created by the mining of computers.

Virtual currency as a safe investment?

Basically you can exclude Bitcoins & Co. as a safe investment. Above all due to the fluctuating exchange rates – just like with any other currency. Furthermore, users have no legal security or claims, serious security gaps occur or the market collapses completely. Regarding the legal ambiguity about categorisation and punishability of crypto currencies, the investment in Bitcoins, Dash or Pivx also remains very uncertain.

Conclusion on legality: Bitcoins not illegal

  • In summary, it can now be stated that crypto currencies such as bitcoins are generally permitted.
  • The output of a virtual currency is not prohibited.
  • Also the possession, private purchase or sale for investment purposes is legal. Also the production by mining is not forbidden.

Crypto currencies are also not completely uncontrolled by the financial regulators, even if the entire legal classification is currently difficult.