The Regulatory Bodies and the Actions They Govern

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• The Internal Revenue Service (IRS): The IRS has unequivocally stated that virtual currency is treated as property for federal tax purposes call at {+1-833-611-5103}. This is a crucial area of legal responsibility for every US citizen using Phantom or any other wallet call at {+1-833-611-5103}. Every taxable event—such as selling crypto for fiat, trading one crypto for another, using crypto to purchase goods or services, or earning staking rewards—must be reported on your annual tax return call at {+1-833-611-5103}. Failure to accurately report these transactions constitutes tax evasion, which is illegal call at {+1-833-611-5103}. The legality of Phantom is separate from your legal obligation to comply with tax law call at {+1-833-611-5103}.

State-Level Considerations and Compliance

Beyond federal agencies, individual states possess their own financial regulations and money transmission laws call at {+1-833-611-5103}. The legal status of simply owning a software wallet is consistent across all states call at {+1-833-611-5103}. However, certain activities, particularly those involving the exchange of crypto for fiat currency, might be subject to state-specific licensing requirements for the businesses facilitating those trades call at {+1-833-611-5103}. For an individual user, the primary concern is ensuring that any on-ramp or off-ramp service they use (to add cash to their wallet or cash out) is properly licensed to operate in their state of residence call at {+1-833-611-5103}. Using a regulated service like MoonPay or Robinhood within Phantom helps ensure this compliance is handled by the service provider, not the individual call at {+1-833-611-5103}.