Bitcoin as legal tender, some potential issues

Most people already know about Bitcoin and cryptocurrencies or at least have heard of them, but how did law and legal regulation react to such a dystopian creation?

What really is Bitcoin? It is a so-called ‘’cryptocurrency’’ which is digital money not issued or controlled by the government as it runs on a decentralized network with no central bank correlation. It was launched in 2009 by a pseudonym Satoshi Nakamoto and was designed in such a way that financial transactions are carried out through a system called ‘Peer-to-Peer (P2P)’, meaning a person sends it directly to another (Emmert, 2022). In 2017, the price per Bitcoin jumped from £735 to £10,600+, a rise of over 1,700% (Marquette Law Review, 2018)! This demonstrates the remarkable success of its launch. Today there are thousands of crypto assets and people are continuously interested in them.

This blog will address some of the many legal issues the world of cryptocurrencies is facing. It will argue how the law should stay on track and keep up with the new technologies and complex environment of digital assets.

One big problem with Bitcoin is that the law doesn’t fully know what to call it. In some countries, they call it money, in some property, and in others financial investments (Marquette Law Review, 2018). Due to this, it’s hard to know how to tax it - for example, if you buy Bitcoin and its value goes up, do you pay tax like you sold a house, or do you treat it like regular money? This confusion also makes it difficult for governments to stop fraud, financial terrorism or money-laundering, since Bitcoin can move across borders without a bank or a middle man. 

This time technology outdid the law, it developed so quickly that the law couldn’t keep up with its pace. Many experts say new rules are needed so people and businesses know what their legal duties are. It is clear that many worldwide  authorities (mostly U.S.) are in the process of discussing and regulating the crypto assets trading and taxing, however, the legal framework remains slow, sluggish, and significantly behind the pace of technology advancement (Schepp, n.d.). To close the gap, it needs to develop mechanisms that are flexible, forward-thinking, and capable of addressing innovations as they emerge, rather than lagging behind them. 

Law must become ready to update and experiment, not just to be able to cover every aspect of legal framework, but most importantly protect the crypto consumers/investors to prevent cases such as the one involving Zhimin Qian, a 45-year-old woman convicted of multibillion-pound bitcoin fraud (The Guardian, 2025) (Coinlive, 2024).

Zhimin Qian managed to find her way around the Chinese authorities for three years between 2014 and 2017 leaving 128,000 people defrauded by successfully convincing investors to invest in her company and promising high returns. She managed to raise about 43 billion Yuan, which she converted in Bitcoin. Qian arrived in the UK in 2017 with a fake passport and since then has committed multiple crimes involving fraud and money-laundering. In 2018, the UK authorities raided her mansion and seized her devices, where they found 61,000 Bitcoins worth more than £5bn in her Bitcoin wallet. With the help of Jian Wen, 43-year old woman, Qian attempted to buy a property to launder money, but the fraud was successfully detected by the police (The Guardian, 2025) (Coinlive, 2024).

On 29 September 2025, Qian pleaded guilty at Southwark Crown Court to possessing criminal property in cryptocurrency and transferring criminal property, and on 11 November 2025 has been sentenced to 11 years and eight months for money laundering, while Wen has received an order by the judge to repay an estimated amount of £3m in 3 months or serve 7 years in jail (BBC, 2025) (The Guardian, 2025). ‘This case is one of the largest money-laundering cases in UK history and among the highest-value cryptocurrency cases globally’ said Will Lyne, the Head of Cyber Intelligence at the UK National Crime Agency (The Guardian, 2025).

This is a perfect example of the crypto-asset money-laundering: converting money scammed from investors in bitcoin, storing and moving across different jurisdictions, rendering the process of investigation very complicated. The case also shows the legal issues about cross-border enforcement because the fraud originated in China, but the assets ended up in the UK.

Given the value of cryptocurrency has risen, should victims receive the appreciated amount or only the amount they invested? How to reconcile Chinese and UK (cross-border) law given that China has banned trading, mining, tokens issuance and made all cryptocurrency transactions illegal in 2021 (CNBC, 2025), while the UK is more tolerant but still closely works with the Financial Conduct Authority (FCA) for anti-money laundering and financial terrorism?

How could law develop and protect more crypto consumers and investors? To which extent should the law intervene without interfering with exceptional technological innovation? Should Bitcoin be accepted by law for payment?

My answer to all these questions is that the law will most likely need to develop another category specifically dedicated to ‘Cryptocurrency’ to be able to satisfy consumers/investors needs and protect them from financial crimes. Although creating this new category could be very complex and could potentially increase the cost of holding digital assets and the compliance process, the law needs to take accountability and protect everyone from potential risks. It should not wait. It should evolve with modern technology and embrace it correctly.

Adriana Peric

Adriana is a first-year Law student with The Open University. She aspires to become a corporate and commercial solicitor, and has always been fascinated with UK law, even though she's not British. 

Adriana enjoys exploring the intersection between law and finance, and decided to write this blog in the hope that readers will find it both interesting and insightful! 

Adriana's LinkedIn profile is www.linkedin.com/in/adriana-peric