Regulation & tax
Regulation is the part of bitcoin that changes fastest and reaches you most directly. This section covers the rules that decide whether you can open an account, what your exchange reports about you, and what you owe when you sell.
KYC is the identity check at account opening; AML is the wider programme it belongs to. The Travel Rule is why your exchange asks who owns the wallet you are withdrawing to, and why some withdrawals now carry a name and an address alongside the amount. MiCA is the European framework that replaced a patchwork of national regimes, with licensing, reserve and disclosure requirements that changed which platforms serve which countries.
Tax terms are the other half. Capital gains tax applies to disposals, and in most jurisdictions disposal is broader than selling for cash. Cost basis is the number the calculation starts from, and the accounting method your country allows for choosing it can move the bill substantially.
Bans, restrictions and legal tender status are here because the answer differs by country. Our country guides cover the specifics for all 231; these entries define the terms those guides use. None of this is legal or tax advice, and the rules change.
16 terms. Last reviewed 2026-08-13.
Terms in Regulation & tax
- Anti-Money Launderingalso AMLAnti-Money Laundering rules are the obligations a country puts on exchanges to detect and report suspicious activity, and they are why a platform can freeze your withdrawal without warning.
- Capital gains taxCapital gains tax is what you owe on the profit when you dispose of bitcoin, and in most countries spending it counts as a disposal exactly like selling it.
- CBDCalso Central bank digital currencyA CBDC is money issued directly by a central bank as a digital record, which makes it programmable and traceable by design and the structural opposite of bitcoin.
- Cost basisCost basis is what you paid for a coin including fees, the figure subtracted from your sale proceeds to compute a taxable gain, and US rules now require tracking it wallet by wallet.
- Cryptocurrency banalso Bitcoin banA cryptocurrency ban is a government prohibition on some or all bitcoin activity, ranging from a blanket criminal ban to a narrower order cutting banks off from exchanges.
- FATFalso Financial Action Task ForceFATF is the intergovernmental body in Paris that writes the anti-money-laundering standards almost every country copies into law, including the rules your exchange applies to you.
- Form 1099-DAForm 1099-DA is the US tax form on which a custodial broker reports your digital asset sales to the IRS and to you, starting with the 2025 tax year.
- Know Your Customeralso KYCKnow Your Customer is the set of checks a regulated exchange runs before it lets you trade: identity documents, a selfie, an address, and a permanent record of all of it.
- Legal tenderLegal tender is a legal status that forces creditors to accept a currency for debts, and bitcoin has held it in only two countries, both of which have since withdrawn it.
- MiCAalso Markets in Crypto-Assets RegulationMiCA is the European Union's crypto licensing law, and it regulates the companies that sell you bitcoin rather than bitcoin itself, which has no issuer to regulate.
- Sanctions screeningSanctions screening is the check an exchange runs on your name and your bitcoin addresses against government blocked-party lists before it lets a transfer through.
- Self-custody rightsSelf-custody rights are the legal protections, mostly proposed rather than enacted, that would guarantee you can hold your own bitcoin keys and transact without a licensed intermediary.
- Travel Rulealso FATF Travel RuleThe Travel Rule requires the exchange sending your bitcoin to hand your name and account details to the exchange receiving it, the way banks pass details with a wire.
- Unhosted walletalso Self-hosted walletAn unhosted wallet is the regulators' name for a wallet whose keys you hold yourself, the thing that sits outside the licensed perimeter and keeps getting rules written about it.
- Virtual Asset Service Provideralso VASPA Virtual Asset Service Provider is any business that exchanges, transfers, or safekeeps crypto for other people, the category the Financial Action Task Force created to pull exchanges into banking rules.
- Wash saleA wash sale is a loss the tax code refuses to let you claim because you bought the same thing straight back, and the US rule still does not cover bitcoin.
The other 13 sections
- BasicsWhat bitcoin is, what a satoshi is, and the handful of ideas the rest of the glossary is built on.
- Addresses & keysWhere coins get sent, what a private key actually controls, and how one seed produces thousands of addresses.
- Wallets & custodyHot, cold, custodial and multisig, and what each one changes about who can move your coins.
- Privacy & securityThe attacks that take people's bitcoin, and the habits and tools that stop them.
- Transactions & feesWhat a bitcoin transaction is made of, why it costs what it costs, and how to unstick one.
- Buying & exchangesOrder types, spreads and fee schedules: the vocabulary an exchange uses while it is charging you.
- Markets & investingMarket cap, volatility and spot ETFs. The language of price, without the price predictions.
- Mining & consensusHow new blocks get made, what difficulty adjusts, and why the rules hold with nobody in charge.
- Protocol & upgradesSegWit, Taproot, soft forks and BIPs: how bitcoin changes and who gets to decide.
- Lightning & layer 2Payment channels, invoices and routing, for moving bitcoin without paying for space in a block.
- Culture & historyMt. Gox, the genesis block, HODL, and the events and slang that shaped how people talk about bitcoin.
- Nodes & softwareBitcoin Core, full nodes, pruning and RPC: the software that enforces the rules.
- Developer referenceP2P message types, opcodes and script terms: the field names you meet reading bitcoin code.