Is Bitcoin mining legal?

This is a complex subject, and the reasoning can vary from jurisdiction to
jurisdiction. Sometimes, people falsely believe that bitcoin mining is like
counterfeiting money, but this simply isn’t true. You’re not creating fake
duplicates of a national currency, but instead creating an entirely new currency.
This last bit is also why some governments oppose bitcoin, and thus
bitcoin mining. Some governments view bitcoin as a threat because it competes with
national currencies. Some governments believe that bitcoin actually undermines
the government itself by offering a non-state currency. Bitcoin can also be mined
illegally. Perhaps the most common example has been the use of malicious
viruses to hijack people’s computers and to then use their processors to mine
bitcoins. This can slow down computers, and also run up energy bills. This is illegal
in essentially every jurisdiction.

Where is Bitcoin Mining Illegal?

Bitcoin mining, as well as the possession and use of bitcoin, is illegal in a few
countries. In other countries, bitcoin use and mining is more ambiguous with the
government sending mixed messages. Bitcoin is currently banned in Russia,
although the most recent legislation to ban bitcoin use and mining was actually
withdrawn. The reason for the withdrawal seems less about outlawing bitcoin,
and more over the extent of punishment. Some Russian authorities want people
who use bitcoin to face multi-year sentences in jail. Others are advocating for a
softer touch. The legal status around bitcoin mining is a bit ambiguous since no
formal laws have been passed, but for now mining in Russia is a high-risk
proposition, at the very least. No other country is as anti-bitcoin as Russia. Of
course, Russia is known for being a relatively authoritarian country. On top of
that, Russia has been struggling through an economic crisis caused by low oil
prices, and sanctions instituted because of Russian activities in Ukraine. Par
the strong anti-bitcoin sentiments in the country may be due to efforts to protect
the ruble, which has suffered massive inflation over the past few years. In South
America, Ecuador explicitly outlaws the production of digital currencies, but
interestingly enough, has launched its own digital currency. The electronic
currency is linked to the U.S. dollar (which is Ecuador’s official currency), and has
been designed to decrease dependence on physical money, and the associated
costs, such as wear and tear of the bills themselves. Ecuador apparently doesn’t
want other digital currencies, such as bitcoin, competing with their own. The
reasons for outlawing bitcoin aren’t always authoritarian in nature. For example,
Iceland currently prohibits trading the local kroner for bitcoins. This is because the
Icelandic economy struggled in the years following the Great Recession, and
authorities instituted capital controls in order to protect the kroner. Authorities
were worried that people would essentially flee the kroner, and that the currency
would be adversely affected. Iceland does not, however, prohibit the mining of
bitcoin. Other governments, like the Indian government, have made negative
remarks against bitcoin but have not launched any official bans on ownership
or mining. For now, mining bitcoin in said countries is generally legal and safe, but
the regulatory environment could change quickly.

Legal bitcoin mining:

In most countries, bitcoin mining is legal. Of course, there are legal ways to mine
bitcoin, which generally means using your own resources, such as electricity and
processing power. On the other hand, there are illegal ways to mine bitcoin, such
as stealing said resources. In this case, mining bitcoins is legal, but you’re stealing
the resources needed to mine them, which is illegal. Also, prosecutors in various
countries, such as the United States and South Korea, have made it clear that they
will prosecute people who use bitcoin for illicit purposes. This should come as no
surprise, and anyone who mines bitcoin or uses it should know not to conduct
illegal activities.


By and large bitcoin mining is a perfectly legal activity. Even in a few countries
that do regulate the use of bitcoin, such as Iceland, mining bitcoin is still legal.
Many countries, including most African countries, have not passed any legislation
for or against bitcoin, and have generally remained silent on the issue. It’s
important to keep a close eye on these countries, because the regulatory
environment could change at the drop of a hat. Please keep in mind that this post
does not substitute legal advice and you should consult a lawyer for your specific
case and jurisdiction.