In the increasingly digital world, cryptocurrencies such as Bitcoin, Ethereum, and others have created a new frontier in finance. This prompts many to ask: is it legal to create your own cryptocurrency? The answer is yes, but it comes with many legal considerations under both Missouri and U.S. law.

Cryptocurrency and the Law

A cryptocurrency is a digital or virtual currency that uses cryptography for security and operates independently of a central authority. As such, cryptocurrencies fall into a legal gray area, as they are not classified as legal tender but are instead treated as property for tax purposes.

Creating Your Own Cryptocurrency

Creating a cryptocurrency is not illegal. Still, the moment you start fundraising for development, or if your cryptocurrency begins to look a lot like a security offering benefits to investors, you can quickly come under regulatory scrutiny. The U.S. Securities and Exchange Commission (SEC) may classify your cryptocurrency as a security under the Howey Test, which opens up a new realm of regulatory requirements.

SEC Regulation and the Howey Test

The Howey Test determines whether a transaction qualifies as an “investment contract” and therefore falls under SEC regulations. If your cryptocurrency involves an investment of money in a common enterprise with an expectation of profits predominantly from the efforts of others, it may be classified as a security.

Regulation in Missouri

Under Missouri law, while there are no specific regulations pertaining to the creation of a new cryptocurrency, any activity related to securities, including digital ones, is subject to securities laws and the oversight of the Missouri Securities Division.

Legal Considerations

Before launching your own cryptocurrency, it is crucial to engage with legal professionals experienced in financial technology and digital assets. They can help navigate potential regulatory obligations, including but not limited to, SEC filings, anti-money laundering (AML) and know-your-customer (KYC) procedures, data protection considerations, and the potential for consumer protection issues.

Conclusion

While creating your own cryptocurrency is not inherently illegal, it comes with significant legal considerations. The landscape of digital currency law is rapidly evolving, and proper legal counsel is crucial to ensure compliance with all relevant regulations. As we move towards an increasingly digital future, understanding and navigating the legal landscape of cryptocurrencies will be more important than ever.

Chad Mann

By admin

I’m a dedicated personal injury attorney based in the Ozarks of Southwest Missouri, committed to standing up for individuals who have been wronged or injured. Since 2017, I’ve focused my legal career on personal injury law—particularly automobile accidents and car crash cases—because I believe in fighting for those who are often overwhelmed by powerful insurance companies and complex legal systems.I graduated with high honors from the University of Arkansas William H. Bowen School of Law, where I had the privilege of serving as Chair of the Moot Court Board. That experience honed both my advocacy skills and my dedication to excellence in legal practice.Before opening my own law firm, I gained invaluable experience working closely with some of the largest insurance companies in the nation. That background now gives me an insider’s perspective on how insurance carriers operate—and I use that knowledge every day to level the playing field for my clients.

SUBSCRIBE NEWSLETTER