I believe this depends on a country. If btc is generally illegal in your country then yes. If it is out of the law then I guess it isn't. If it is legal then probably you need some kind of a licence to do such things. You can check it here:
https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country. And yet I think it is crazy if that's true people get arrested selling btc without a licence. Come on! Does it really always has to be about taxes and stuff?
I never heard that someone are arrested just to sell bitcoin.. maybe i they are selling a large amount of bitcoin because if they exchange a large amount of bitcoin they can get a large amount of money that there is no proof where he get it.. unless if he is mining bitcoin..
Here in my country i think bitcoin is legal since there is a building for bitcoin the main company that we are using their service online we are using their wallet and many other service that we can use our bitcoin like paying bills shop online they already some merchant partner and i think more adoption will come here in my country..
So i think it is impossible that bitcoin will be illegal we know that bitcoin are uses in some illegal activities in dark web but it is just like the same as fiat it can be also happen so it is normal that there is deals like drugs weapons and paying for bitcoin.. because of anonymous benefits of bitcoin..
But it is not the case because it is also happening in other currency..