Is crypto mining legal in the US? Rules and taxes
Yes, mining cryptocurrency is legal in the US, but the IRS taxes mined coins as income and state or local rules can restrict where you mine.
Vahe HakobyanEditor-in-chief
Updated Oct 6, 20263 min readFact-checked
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- Selling mined crypto later creates a capital gain or loss.
- State and local zoning, noise, and energy rules can restrict mining.
- Pool mining and solo mining follow the same income rule.
The rules depend on what you do with the coins and where your equipment runs. Federal agencies focus on tax and anti money laundering.
Is crypto mining legal in the US?
Mining is legal at the federal level. No federal law bans it. The main federal rules come from the IRS and FinCEN.
How does the IRS treat mined crypto?
The IRS treats virtual currency as property. The tax rules depend on when you receive the coins, whether you mine as a business, and what you do with them later.
Does FinCEN regulate crypto miners?
FinCEN is the federal anti money laundering agency for money services businesses. It issued guidance in 2019 about miners. The guidance explains when miners fall under money transmitter rules.
- Mining for your own account usually falls outside money transmitter rules.
- Transmitting crypto for others can trigger FinCEN registration and reporting.
- There is no federal mining license from FinCEN or any other agency.
Can state or local rules restrict mining?
Yes. State and local governments can restrict mining through zoning, noise, and energy rules. In 2022, New York placed a two-year moratorium on certain proof of work mining that uses carbon based power.
Frequently asked questions
It depends on whether you mine to make a profit and how consistently you do it. A business may owe self-employment tax, while a hobby has different deduction limits.
Yes. The IRS taxes mined crypto as ordinary income at fair market value when you receive it.
The same tax rules usually apply to both. A pool pays you smaller amounts more often, while a solo miner receives a block reward less often.
No federal agency issues a mining license. FinCEN rules can apply if you transmit crypto for others.
