Bitcoin Forum

What are the legalities behind faucets?

the revenue is so low  that no one is going to bother with them, also they are completely in crypto currency , there is no fiat involved there, so not taxable and obviously legal

Fair enough, was just curious, because you can cash out BTC to fiat. Ultimately it is profit in a security.

There are two sides to faucets....

Those who visit them to try and earn some bit/altcoins and those who own and manage the faucets.

On the visitors side I cannot see any problem. I doubt anybody will ever be able to earn anything significant enough to even appear on the tax radar. Most countries have a minimum earnings in their tax system under which you do not have to report and or pay taxes and I really doubt one will ever be able to reach those limits just from faucets, even if sitting on them 24/7.

On the owners side there could however be some implications depending on the income derived from said faucet through advertising. I'm not sure what some faucets generate from advertising but this might cross those minimum levels meaning that there might be tax implications.

Well in another thread we have came to the conclusion that one good faucet can earn around 4 BTCs a month. This is more than $1000 in today prices. I am not sure, but in some countries, especially with low level incomes, this amount should be taxable.

I live in country with higher incomes, specifically France, and in this country this income is under the line for tax paying, in other words, this wouldn't be taxable here. Then of course it depends if this would be solely an income of one person or this person would have more income on the side. I think all of the faucets owners have other incomes on the side, so in this case this amount of 4 BTCs a month, combined with other income would be taxable.

Anyone can start faucets, there is no big deal in making a faucet.
And yes the faucet owners have to file in income tax about the earnings from faucets,because in case of moonbitco.in it is making more than enough of what they are paying their users. So yes according to me you should also specify the income from faucets to be on safe side.

Think of faucet as a site that gives you points for visiting them and you can redeem those points for buying any product.Now do you see anything illegal in this?Faucets works the same way they only give you free bitcoin,how you use that bitcoin may be legal or illegal

Exactly, faucets are operating on really low volume so they are irrelevant. The Governments mostly care about bitcoin exchanges, marketplaces and casinos since there is a bigger bitcoin volume.

means the faucet was not illegal, but using bitcoin of results faucetnya who could become illegal or not depend on you, thats a good opinion  :)

But sometimes govt. do interfere in there business. Recently PD was banned in US.
And central banks keeps on releasing warnings saying stay away from these cryptocurrencies.

I think PD was banned in US because it's illegal to gamble online in the United States. If I'm wrong please someone correct me, but I always thought that was the case.

I thought faucet owners are like blog sites of the owner where he/she posts his/her advertisements and pays for the visitors with some captcha's just to know that the visitor is not a robot.

So how could that be illegal?

Think you are right, a lot of gambling sites have also stopped operating in the UK as they require a license to do so.

I am not sure if the faucet requires a license
I think faucet only require hosting and capital to fill the faucet with bitcoin very much

PD is a gambling site not faucet, I think that is why the US government decided to ban it.

I guess it all comes down to the amount of money involved. If it is, let say, <$10/day, then the government will not waste their effort in trying to put in regulations/rules/whatever.

It also depends on geographic location because cyber laws,like other civil and criminal laws,differ from country to country.If the server your faucet is running on,is located in a country where bitcoin is not explicitly illegal,you can run your faucet without any legal implications.