Topic: Is it legal to receive Bitcoins from Foreign countries? (Read 1635 times)

                                          IS IT LEGAL TO RECEIVE BITCOINS FROM ABROAD?

According to New Delhi based law firm - Lexcounsel, from the perspective of foreign exchange control laws, purchase of VCs by an Indian resident, can be viewed as import of a software/computer programme into India, requiring compliance with applicable foreign exchange control laws including RBI's Master Direction on import of goods and services into India, with respect to imports being made in non-physical form. Though they haven't mentioned exactly what compliance is required & what is RBI's Master Direction.
   Will appreciate if anybody here who knows what compliance is required & what is RBI's Master Direction, guides other members as well.
   
   On the other hand, The article titled as "Can Bitcoin Be Banned by the Indian Government?" on cis-india.org states, if a person imports a computer programme into India he would have to pay the customs duty at the prevalent rates, however if this import of software is done via the internet and does not involve any physical shipments (e.g. downloading paid software from the internet) then no import duty is levied on the import of computer software in India. This would mean that any person buying a computer programme or software from a vendor abroad would not be liable to pay any customs duty or file any documentation with the customs authorities in India. This situation would also be applicable to any person buying Bitcoins from an online exchange based outside India. The only documentation that would be required for buying Bitcoins from an online exchange abroad would be that which the bank may insist upon for converting Indian rupees into a foreign currency and then transferring it to an overseas account. This documentation would involve filing of Form A-1 if the total value of the money being exchanged is greater than USD 5,000 however if the amount of money being exchanged is less than USD 5,000 then the person is only required to give a simple letter containing basic information viz. the name and the address of the applicant, name and address of the beneficiary, amount to be remitted and the purpose of remittance. If the transaction is done using a credit card then in most instances, banks would not insist upon this letter since these transactions usually go through their automated channels.   

So, I have a few questions here:

1. According to Vipul Kharbanda, we don't need to file any documentation (except the documentation which your bank may insist upon) while importing Bitcoins like this from an online exchange(he hasn't mentioned anything about the documentations you need to file if you are buying Bitcoins from an individual). Can anybody guide me whether Mr. Vipul is right here or not?

2. What documentation we need to file if we are buying Bitcoins from an individual located outside India?

3. What if the imported Bitcoins are sold for INR?

4. What if a person is importing Bitcoins on frequent basis & selling it for INR(commercial purpose)? What documentation filing or compliance will it require?
 
The article titled as "Can Bitcoin Be Banned by the Indian Government?" on cis-india.org says, although we have determined above that Bitcoins would in all probability be treated as goods and therefore any sale of Bitcoins would be governed by the Sale of Goods Act, 1930 however it must be noted that the Sale of Goods Act does not regulate barter transactions. This is so because the sale of goods means a contract whereby the property in the goods is actually transferred by the seller to the buyer and according to section 4 of the Sale of Goods Act the transfer of the property in the goods is for a price, i.e., for money consideration. As price is an essential element of a contract of sale, barter is ruled out from a transaction of sale of goods. This means that any transaction whereby payment is made in Bitcoins would come within the category of a barter transaction, for example if flipkart.com starts accepting payment in Bitcoin then the transaction of paying for a pair of shoes through Bitcoin would infact be a barter transaction and would not be governed by the Sale of Goods Act.
   As mentioned in the research paper by NDA, an interesting issue that arises is the implications of a contract that provides Bitcoin as consideration, i.e., payment, under the contract. Contract Act does not provide the form or manner in which consideration may be paid by one party to another. However, in a contract for sale of goods under the Sale of Goods Act, consideration cannot be in kind. As held by the Supreme Court in Commissioner of Income Tax, Hyderabad v. Motors and General Stores (P.) Ltd., Section 2(10) of the Sale of Goods Act defines “price” as meaning the money consideration for a sale of goods. The presence of money consideration is therefore an essential element in a transaction of sale under the Sales of Goods Act and not a transaction under Contract Act. If the consideration is not money but some other valuable consideration it may be an exchange or barter but not a sale. As long as Bitcoin are not currency / legal tender, they can only be considered as ‘value for money’ or goods. Therefore, Bitcoin would qualify as a consideration under the Contract Act but not as consideration under the Sale of Goods Act.
   Does this mean that when I buy bitcoins from an individual/company located abroad, the Sale of Goods Act will be applicable & when I export goods or render services to someone aborad & accept payment in the form of Bitcoins, the Contract Act will be applicable?

The above mentioned article states, if Bitcoins are transferred from a person residing outside India to a person resident within India then that would amount to import of computer programmes within India where this transfer is done in return for the Indian party sending money. If this transfer is done in return for the Indian party sending an item or rendering a service to the foreign party then this would be a barter transaction. It is useful to note that although the Indian import and customs regulations do not mention barter transactions, the guidance on the website of the Directorate General of Valuation, Central Board of Excise and Customs, Government of India seems to suggest that barter transactions for import of goods although are not prohibited but do present unique problems of valuation of the goods. However since software imported online does not attract any duty under Indian law, therefore it would be immaterial to discuss exactly how a barter transaction involving Bitcoins should be valued under the Indian customs regime. For the purposes of this discussion it is sufficient to note that a Bitcoin transaction entered into by an Indian with a party outside India is not prohibited as long as the item or service being exported out of India is itself legal and above board. For example, a transaction involving an Indian designing a website for a person sitting in Australia and being paid in Bitcoin would be legal whereas sending contraband substances to the same person while getting paid in Bitcoin would not be allowed. This would be the legal analysis for a general citizen but this analysis is subject to regulations governing specific instances, for example exchange or goods or items from certain countries may be declared illegal or the receipt of foreign articles by certain class of entities may be banned or otherwise regulated, such as political parties or Non Governmental organisations (“NGOs”).

I again have a few questions:

1. Mr. Vipul says, the software imported online doesn't attract ANY DUTY under Indian law, so is he right here?

2. What legal procedure like documentation filing, obtaining a particular license etc. you will have to follow when you are doing such kind of barter transactions on regular basis?

3. What if you sell the Bitcoins you have received as consideration for INR?

4. Which laws these kind of transactions are supposed to be in compliance with?

5. Can anyone here guide others on, which countries term exchange of goods or items (barter transactions) across borders as an illegal activity?

FEMA regulates all inbound and outbound foreign exchange related transactions, in effect regulating (or managing) the capital flows coming into and moving out of the country. Section 3 of FEMA states that other than as provided (and specifically enunciated) in either FEMA (or its underlying rules and regulations) or unless a special or general permission of RBI has been obtained, no person shall:

i. make any payment to or for the credit of any person resident outside India in any manner;
   Does this mean if I buy Bitcoins from someone(Individual/Company) outside India, I can't make any payment to them in any manner (Not even through legitimate banking channels)?
   
ii. receive otherwise through an authorized person, any payment by order or on behalf of any person resident outside India in any manner;
   Does this mean that if I export goods or render services to someone(Individual/Company) abroad, I am not supposed to accept any payment from them in any manner (including Bitcoins)?

iii.enter into any financial transaction in India as consideration for or in association with acquisition or creation or transfer of a right to acquire, any asset outside India by any person.’

(Note : I just was not able to understand what does the above mentioned S.3 of FEMA state. So any guidance on the same will be highly appreciated).

The research paper by NDA states, from the above, it could be argued that purchasing of Bitcoin by a resident Indian from a person resident outside India (where money for purchase of Bitcoin is transmitted through legitimate banking channels) will not be in violation of FEMA. Further, Bitcoin transaction between two residents should also not trigger FEMA and should not therefore be in violation of the same. However, the sale of Bitcoin to a non-resident person (i.e. to a person outside India) by a resident Indian will be in violation of the provisions of FEMA. Further, it can also be regulated by RBI in this condition.

                         WHETHER BITCOINS ARE LEGAL IN INDIA? IF SO, WHY?

As such, there is no prohibition to mining or trading in Bitcoin or transfer of Bitcoins. Following points to be kept in mind:
Constitution of India, 1950; If we look at the present entries enumerated under Entry 36 and 46 of List I of the Seventh Schedule read with Article 246 of the Constitution, which states that the Central Government is allowed to legislate in respect of currency, coinage, legal tender and other like instruments respectively. It is also stated that each entry will be read in a broader and widest possible sense. However, Court has never interpreted these entries to include “Virtual Currency”. Thus, even if parliament has power to make law on the “Virtual Currency” under Article 248 of the Indian Constitution. However, the same has not been done. Since, in the present scenario “contract” also includes “electronic contract”. S. 23 of the Contract Act provides that certain considerations are unlawful and certain contracts may be opposed to public policy. Public policy has not been defined in the Contract Act and is an evolving expression. The Supreme Court has held that courts ought not to be quick to expand on the scope of what is public policy, they may, in the context of facts and circumstances take into account new developments and explain the same in the context of public policy. Section 23 of the Contract Act provides: What consideration and objects are lawful, and what not. The consideration or object of an agreement is lawful, unless -
it is forbidden by law;
or is of such nature that, if permitted it would defeat the provisions of any law;
or is fraudulent;
or involves or implies, injury to the person or property of another;
or the Court regards it as immoral, or opposed to public policy.
   In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void. The Supreme Court has held that courts would not arbiter on soundness or otherwise of general policy decisions. Further, courts ought not to engage in the exercise of whether one particular policy is good over the other. There is nothing in law to suggest that Bitcoin are opposed to public policy or otherwise unlawful. A contract relating to Bitcoin, prima facie, is not such that its enforceability would defeat the provisions of law or is otherwise fraudulent. Therefore, a contract respecting Bitcoin, whether it is in relation to mining of Bitcoin, transfer of Bitcoin or transfer of Bitcoin for consideration, is not per se illegal.
   But a court is empowered to hold that Bitcoin are opposed to public policy and therefore not valid consideration under Indian law. However, the same has neither been amended nor been interpreted by the Court to include Bitcoin. Hence, it falls under the ambit of Contract Act but even if court states that a Bitcoin contract is opposed to public policy, it will be limited for only that particular contract and will not extend to the all Bitcoin contracts.

                                                               PART X
 
                            CONCLUSION

From the above posts it can be concluded that under the existing laws in India,

1. Bitcoin isn't Indian currency. It is not bank notes and is consequently not legal tender in India. Plus recent comment from the executive director, S Ganesh Kumar at the FIBAC banking event made it clear that RBI is not going to accept it as Indian currency.

2. Bitcoin isn't a security or derivative. But the central government has the powers to declare it a security. In that case Bitcoins will be regulated by SEBI.

3. Bitcoin isn't a prepaid instrument. Though I am not sure whether it can be considered as a payment system or not.

4. Bitcoin isn't a negotiable instrument.

5. Bitcoin may fall under the ambit of 'Computer' & given it's nature it is most likely to be defined as a 'computer program' & by logical extension Bitcoin should be considered as 'movable property'.

6. Bitcoin can be classified as 'Goods' of intangible nature as well as a 'Commodity'.

NOTE : Although Bitcoins can currently be classified as a computer/computer program/movable property/goods/commodity, this position is not tested in a court of law.

Is it legal to receive Bitcoins from Foreign countries? The legal status of bitcoin varies substantially from country to country and is still undefined or changing in many of them. Whilst the majority of countries do not make the usage of bitcoin itself illegal (with the exceptions of: Bangladesh, Bolivia, Ecuador, Kyrgyzstan, and Nepal), its status as money (or a commodity) varies, with differing regulatory implications. While some countries have explicitly allowed its use and trade, others have banned or restricted it. Likewise, various government agencies, departments, and courts have classified bitcoins differently. While this article provides the legal status of bitcoin, regulations and bans that apply to this cryptocurrency likely extend to similar systems as well.

                                                               PART IX

                            IS BITCOIN A COMMODITY?

According to Mr. Venugopal Badarawada, a life member of Bitcoin Foundation Inc(USA), who had sent a legal letter to the Reserve Bank of India (RBI) in January 2014 seeking clarification on its stance against virtual currencies & demanding a clear policy framework, Bitcoin is an “Electronic Document” as per Information Technology Act 2000/8 (ITA 2008) and hence carries “Legal Recognition”. If this “Legal Recognition” has to be removed, it would be necessary to amend ITA 2008 & therefore RBI has no rights to ban Bitcoins. Whether this electronic document is a “Currency” or a “Commodity” or a “Derivative” is left to the community to decide based on their perception on its usage. For want of a better description, it is better to consider Bitcoin (as in deed any Cryptocurrency) as a “Commodity in electronic form which the public may use for any legal purpose”. No other conclusion is logical.

The term commodity has not been defined anywhere under the law in India. In the case of Tata Consultancy Services V. State of Andhra Pradesh, Hon’ble Justice Sinha concurring with the court’s view stated, “computer software is intellectual property, whether it is conveyed in diskettes, floppy, magnetic tapes or CD ROMs, whether canned (Shrink-wrapped) or uncanned (customized), whether it comes as part of computer or independently, whether it is branded or unbranded, tangible or intangible; is a commodity capable of being transmitted, transferred, delivered, stored , processed , etc. and therefore as a ‘good’ liable To sale tax.” He also added that a commodity is generally understood to mean goods of any kind, something of use or an article of commerce.

Since bitcoin is basically a computer software & may come under the ambit of goods, it leaves open the possibility of being characterized as a commodity under Indian law.

                                                                 PART VIII

                            IS BITCOIN A GOOD?

Bitcoin may very well fall under the meaning of “goods” and may be covered under the Sale of Goods Act. The act defines “good” as:
“every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale.”
   Further the Forward Contracts (Regulation) Act, 1952 also defines goods to mean “every kind of movable property other than actionable claims, money and securities”.

In Tata Consultancy Services v. State of Andhra Pradesh, the Supreme Court stated that, “computer software is intellectual property, whether it is conveyed in diskettes, floppy, magnetic tapes or CD ROMs, whether canned (Shrink-wrapped) or uncanned (customized), whether it comes as part of computer or independently, whether it is branded or unbranded, tangible or intangible; is a commodity capable of being transmitted, transferred, delivered, stored, processed, etc. and therefore as a ‘good’ liable To sales tax.”

On a bare reading it seems that Bitcoins can be classified as 'Goods' of intangible nature (akin to a computer programme or software).

We will see whether Bitcoin can be classified as 'Commodity' under the current legal regime in India, in next part.

Thanks dude for appreciation. I have spent so much of time to study this thing & it really feels good when someone appreciates your hard work .

I don't run any blog/site. That's why I have documented it here.

Yes, I will keep posting here & will appreciate advice/suggestion/guidance/correction or any kind of contribution from members.

I generally try to avoid such kind of arrogant people who think they are the only creatures with brain on this planet (I have seen many on this forum). But this stupid fellow pissed me off. I have done a lot of hard work on this topic & don't expect such kind of baseless replies.

Anyways, thanks once again for your support.

Good thread, though there has been enough working to categorize bitcoin into existing laws the efforts haven't been productive much because it lacked general acceptance. You should probably document it on your blog site. Keep the posts coming, critics can always correct if they have a valid debate.

Also try and have thick skin on internet, there always will be baseless and unthankful comments thrown to you.

                                                                 PART VII

                             IS BITCOIN A PROPERTY?

The General Clauses Act, 1897 defines the term movable property as property of every description, except immovable property. Immovable property has been defined to include land, benefits arising out of land or things attached to the earth or permanently fastened to anything attached to the earth. Clearly Bitcoin which is a computer programme as explained above, would not fit into the definition of immovable property and relying upon the broad definition of movable property in the General Clauses Act, 1897 it can be said that a computer programme and by logical extension Bitcoins should be considered as movable property.

We will see whether Bitcoin can be classified as 'Goods' under the current legal regime in India, in next part.

Yes it is legal. But the purpose to start this thread is to get the answer on whether it is legal to buy it from an individual/company overseas or accept it as a form of payment in exchange of the goods exported or services rendered abroad.

So, you think you are a genius? BTW why did you call me a noob? Can you explain? Just because my profile says that I am a newbie, it doesn't mean I speak nonsense. Don't know why people like you exist on this planet. Who think that just because they have got the tag of "Legendary" (Possibly just because of being active here & posting shitty replies like this), they think they have become enlightened. Fcuk off brainless.

There is no regulation on Bitcoin in India by government . So as of now it can be said as legal . But what comes in future by government is unknown .

I'm sorry to say, u appear to be a complete noob, who is doing nothing but spreading misinformation.

                                                                 PART V

                     IS BITCOIN A NEGOTIABLE INSTRUMENT?

The term negotiable instrument on the other hand is defined in the Negotiable Instruments Act, 1881 and defines a negotiable instrument as a “promissory note, bill of exchange or cheque payable either to order or to bearer”. Since the terms promissory note, bill of exchange or cheque are easily understood in trading parlance, there is no need to go into the definitions of these instruments as provided under the Negotiable Instruments Act, 1881, suffice it to say that Bitcoins do not fall under the definitions of any of these terms under the Act.

We will see whether Bitcoin can be considered as 'Computer or Computer program' under the current legal regime in India, in next part.

                                                                PART IV

         IS BITCOIN A PAYMENT SYSTEM / PREPAID PAYMENT INSTRUMENT?


RBI regulates 'payment systems' and 'prepaid instruments', which require prior authorization of RBI and compliance with the regulations/directions issued by RBI in relation thereto. According to the research paper by Nishith Desai Associates, though Bitcoin is often referred to as the peer-to-peer payment system, cannot clear or settle the payment between the payer and the beneficiary. Thereby it is not to be treated as a ‘payment system’ under the Payment Act.
   I couldn't understand what they wanted to say here. If the payer & beneficiary both agree to deal in Bitcoins then it can clear or settle the payment between the two. So, I am still unclear on whether Bitcoin can be considered as a payment system or not.
   
The enactment of the Payment and Settlement Systems Act, 2007 has brought the payment systems involved in the issuance of prepaid payment instruments under the regulatory jurisdiction of the RBI. In exercise of its powers under Section 18 of the Payment and Settlement Systems Act, 2007 the RBI on April 27, 2009 issued policy guidelines governing institutions issuing prepaid payment instruments such as mobile wallets, Paypal, etc. In these guidelines the term Prepaid Payment Instrument is defined in the following words:

Pre-paid payment instruments are payment instruments that facilitate purchase of goods and services against the value stored on such instruments. The value stored on such instruments represents the value paid for by the holders by cash, by debit to a bank account, or by credit card.
   Since Prepaid Payment Instruments have a definite value stored on them which is equal to the amount paid by the holders in cash or by debit or credit card, it seems that Bitcoins cannot be classified as Prepaid Payment Instruments since there is no static value stored in Bitcoins, rather they have an inherent value. In other words the amount of money that a person pays to buy Bitcoin does not represent the value of the Bitcoins that the person is buying, rather the value (or exchange rate) of Bitcoins keeps changing on a daily basis. Since the value of a Bitcoin are determined by market speculation, it can be either less or more than the payment obligation it is traded for & hence it cannot be said that the value stored in the instrument represents the value paid by the holders. Therefore Bitcoins cannot be classified as prepaid payment instruments because the value stored on prepaid instruments such as Paypal is always constant and is equal to the amount of money paid to the system to get a Paypal balance, but this is not the case with Bitcoins.

Further, Bitcoin can be generated by a user to himself by the use of software. These Bitcoin issued by the software will not fall in any of the three permitted categories of pre-paid payment instruments in India: Closed system payment instruments, Semi-closed system payment instruments and Open system payment instruments. The maximum value of these pre-paid payment instruments cannot exceed INR 50,000 with a minimum validity of six months from the date of activation or issuance to the holder. Banks that comply with the eligibility criteria are authorized to issue three kinds of pre-paid payment instruments and Non-Banking Financial Companies (“NBFC”) and other persons have been authorized to issue only semi-closed system payment instruments. This infers that the issuer of a pre-payment instrument needs to be either a bank, NBFC or a ‘person’. It can be said that while Bitcoins are “mined” by individuals, they are “issued” by the software. Therefore Bitcoin issued by the software cannot be classified as pre-paid instruments since a server or software cannot be termed as a ‘person’. The software further cannot be regulated within the minimum capital adequacy requirements set for issuers of pre-paid instruments as issuers require a capital of Rs.100 lakh and specific sanction from the RBI. Additionally, only banks which have been permitted to provide Mobile Banking Transactions by RBI are permitted to launch mobile based pre-paid payment instruments (m-wallet and m-accounts). Thereby rendering Bitcoin issued by a mobileapp outside the purview of regulation of pre-paid instruments as these Bitcoin are not circulated by a bank that has prior approval of the RBI. In conclusion, Bitcoin do not fall within the recognized definition of pre-paid instruments.

We will see whether Bitcoin can be considered as 'Negotiable instrument' under the current legal regime in India, in next part.

                                                                   PART III

                     IS BITCOIN A SECURITY OR DERIVATIVE?


The Securities Contracts (Regulation) Act regulates transactions relating to and involving securities. The term “securities” is defined in section 2 (h) of the SCRA, 1955 in the following manner: “securities” include —

(i) shares, scrips, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature in or of any incorporated company or other body corporate;
   (a) derivative;
   (b) units or any other instrument issued by any collective investment scheme to the investors in such schemes;
   (c) security receipt as defined in clause (zg) of section 2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;
   (d) units or any other such instrument issued to the investors under any mutual fund scheme;

(ii) Government securities;
   (a) such other instruments as may be declared by the Central Government to be securities; and

(iii) rights or interest in securities;”

The first issue in this regard is that while all of the above instruments have an underlying capital asset (the assets of the company issuing them for example and hence the reference to the term “security”), there is no underlying asset in relation to Bitcoin. The second issue is that Bitcoin are not “issued” by anybody but are created from the activity of mining. The above aspects also apply in relation to whether Bitcoin could qualify as “derivatives”. Apart from the term derivative, the only other way in which Bitcoins can be brought under the definition of ‘securities’ is if the Central Government notifies Bitcoins as such since the Central Government has the power to declare any instrument as a ‘security’. In such a scenario it will be the entire gamut of regulations governing securities including the various rules and regulations prescribed by the Securities and Exchange Board of India (SEBI).

The definition of “derivative” under Section 2(ac) of the SCRA is
“derivative” includes—

(A) a security derived from a debt instrument, share, loan, whether secured or unsecured, risk instrument or contract for differences or any other form of security;

(B) a contract which derives its value from the prices, or index of prices, of underlying securities;

As discussed above, Bitcoin is not a security and therefore would not satisfy the first part of the definition of “derivative” within the SCRA. Further since Bitcoin is only a voluntary currency based on two parties deciding that the code itself has some value, therefore Bitcoin can also not be described as a contract which derives its value from the prices or index of prices of underlying securities. Therefore it is clear that Bitcoin would not satisfy the requirements of being a derivative under the SCRA. Under Indian law, another definition of the term derivative is provided under the Reserve Bank of India Act, 1934 which defines “derivative” in section 17(6A) to mean:
an instrument, to be settled at a future date, whose value is derived from change in one or a combination of more than one of the following underlyings, namely:--
(a) interest rate,
(b) price of securities of the Central Government or a State Government or of such securities of a local authority as may be specified in this behalf by the Central Government,
(c) price of foreign securities,
(d) foreign exchange rate,
(e) index of rates or prices,
(f) credit rating or credit index,
(g) price of gold or silver coins, or gold or silver bullion, or
(h) any other variable of similar nature.

Since Bitcoins are used as currency because Bitcoin users think it has inherent and not because its value is derived from any other underlying thing or object, therefore Bitcoin cannot be said to fall under the definition of “derivative” under the Reserve Bank of India Act, 1934 either.

We will see whether Bitcoin can be considered as 'prepaid payment instrument/payment systme' under the current legal regime in India, in next part.

Thanks for answering my question. BTW I have seen a few posts on fb where people are selling Neteller USD, Skrill USD etc. for Indian rupees. So, is it legal to buy these e currencies (For ex. Neteller USD) in INR & then buy Bitcoin with these currencies? I think it will cost me little less if I go by this way rather than buying Bitcoins directing in INR.

And yes due to many reasons like their peer to peer nature, anonymity feature, extremely volatile prices etc, the central government & RBI are not in the favor of VCs

E currency are considered digital currency with stable price.as you can see other payment option like paytm, mobikwik ,etc.they are connected to bank and indirectly to rbi so they have knowledge and can seek knowledge for larger transaction.while bitcoin as anonymous can not be traced to a individual holder thats the major problem that rbi is still not accepting cryptocurrency and volatile price issue as well.

What does e-currency mean? Does that mean fiat currencies on platforms like Skrill, Neteller etc?

Yes, cryptos aren't regulated by the central government yet but that doesn't mean that there are no laws surrounding it. While dealing with them you must be careful that you don't violate existing laws of the country. As far as I know Bitcoins don't feature complete anonymity. Though few altcoins like Monero aren't traceable at all.

BTW what do you mean by private bitcoin wallet? Do you mean a wallet where you have control over the private keys?