When you trade or hold cryptocurrency, you’re not just dealing with price swings—you’re stepping into a world of crypto legal risks, the real-world consequences of breaking financial laws while using digital assets. Also known as crypto regulatory exposure, these risks include tax crimes, unlicensed operations, and violating international sanctions—all of which can turn a simple trade into a federal case. The IRS, FATF, and global regulators aren’t watching quietly anymore. They’re tracking every wallet, every exchange, and every airdrop claim.
One of the biggest crypto tax evasion, the act of hiding crypto gains from tax authorities to avoid paying owed taxes. Also known as unreported cryptocurrency income, it’s no longer a gray area. In 2025, the IRS can trace every transaction from Coinbase to a decentralized exchange. Failing to report can mean five years in prison and $250,000 in fines. And it’s not just the U.S. Countries like Bolivia now require crypto trades to go through licensed banks. Go around them? You’re breaking the law.
Then there’s FATCA cryptocurrency, the U.S. law that forces Americans to report foreign-held crypto assets, even if they’re on a non-U.S. exchange. Also known as foreign crypto asset reporting, it applies to anyone with over $50,000 in overseas holdings. If you held $SILVER tokens on a non-U.S. platform or bought $ASPO tokens through a foreign DEX, you’re required to file Form 8938. Skip it? You’re not just being careless—you’re risking criminal charges.
And don’t think mining is safe. In Iran, unlicensed crypto mining, the illegal use of public electricity to run crypto rigs, often controlled by state-backed groups. Also known as sanctions evasion crypto, it’s not just illegal—it’s funding regional conflicts. Ordinary citizens get blackouts so mining farms can run 24/7. If you’re mining without a license anywhere, you’re playing with fire—even if you think no one’s watching.
These aren’t abstract risks. They’re real. People are getting arrested. Platforms like GSAE and CherrySwap vanished because they had no legal standing. Airdrops like DogeMoon and FOC? They’re scams, but the people running them are still breaking laws by stealing identities and collecting private keys. Even if you’re just trying to save on taxes or chase a free token, you’re still in the crosshairs.
What you’ll find below isn’t theory. It’s case after case of people who ignored the rules—and what happened when they got caught. From FATCA filings gone wrong to mining operations shut down by federal agents, these are the stories regulators don’t publish. But you need to see them.
Cross-border crypto transfers from Egypt are illegal under Law No. 194 of 2020, with penalties including fines up to $213,000 and imprisonment. Despite this, millions use crypto to escape inflation and currency collapse, creating a dangerous underground market.