## Are Bitcoin / Cryptocurrency free & paid "Faucets" illegal in the USA?

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I was wondering if Bitcoin faucets were illegal in the USA? What about a paid bitcoin faucet where you pay in other coins to get a few cents worth of BTC?

I don't think so due to small amounts involved. – Felipe – 2014-08-07T22:08:03.920

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The trade of cryptocurrencies for other cryptocurrencies is not regulated in the United States under FinCEN guidance or IRS guidance, as of August 12th, 2014

Cryptocurrencies are designated as property under IRS guidance, and property generally enjoys like-kind treatment to defer capital gains until that property is exchanged for US Dollars (or other fiat currency) and kept in US Dollars for a certain period of time. These are property regulations and a consequence of designating cryptocurrency as property.

As such a 'paid' faucet would not be money transmitting, or incur a tax event. And there are no other prohibitions on cryptocurrencies in the United States (from a federal standpoint, state and municipal governments may have leeway to make up something else).

A free faucet, on the other hand, may incur a tax event of some type (income?), but the amount is typically very small and sanctions against amounts that small are an afterthought.