Only LEGAL TENDER is recognized in the law. That's part of why fiat money has value.
You only have to comply with laws if you changing money into legal tender.
If you just trade Bitcoin -> PayPal -> Poker Chips etc. the regulations should be minimal.
But as soon as you add £ $ € symbols or equivalent prices that trade will be recognized by the laws and taxes of said currency.
Please comment only if you have something interesting to say, and do add which legal framework you are referring to.
It is false to say that only legal tender is "recognized" by law. E-currency is not legal tender, yet it is considered money by European regulation.
The distinction between e-currency, virtual currency, stored value, etc. is definitely non-trivial and doesn't care for mere opinions, in Europe they all have specific regulatory requirements and definitions.
For example, Paypal is e-currency in Europe, because it is a claim on its issuer expressed in fiat. So no, just dealing with Paypal does not shield you from the regulatory burden.