Where to Buy Bitcoin Massachusetts

Massachusetts has yet to give clear guidance on the legality of buying and selling bitcoin on exchanges. Accordingly, there are some exchanges that accept residents of Massachusetts even though it is unclear.

A snapshot of Massachusetts Cryptocurrency Market:

It is legal to buy and sell bitcoin in Massachusetts
As an individual you must be at least 18 years old
There is no state licensing or registration framework for Local Cryptocurrency Exchanges
Foreign “Offshore based” exchanges are to have a Local State License

There are several ways to buy bitcoin in Massachusetts. The most common way is through bitcoin exchanges (although there is no licensing framework). Bitcoin can also be bought through ATMs, mining and exchange for goods and services.

If you want to buy and sell bitcoin in Massachusetts, choose from the following exchanges:

Top 5 Massachusetts Bitcoin Exchanges

Overview of Massachusetts Bitcoin Exchanges

The legality of cryptocurrency trading in Massachusetts is confusing to say the least. However as an individual you can lawfully buy and sell bitcoin. Therefore if you can find an exchange that accepts you, it is the exchange that is at risk.

When choosing an available exchange, unlike other US State that can rely on licensing, you will need to rely on the reputation, size and other factors to select an appropriate exchange for you.

Even though there is no state licensing, you will still need to meet KYC verification requirements.

In the following paragraphs, we list out the important features that you should consider when signing up to a bitcoin exchange.

🔒 Safety and Security

Since there is no formal licensing arrangement in Massachusetts, extra care needs to be applied to safety and security. States that do have a licensing and registraiton process often require compliance standards to be met. This safe guards the customer. In Massachusetts there are no safeguards in place, hence we have to rely on the reputation of the exchange and their history of operating in other states.

Fortunately, gone are the days of exchanges being hacked with large sums of bitcoin being stolen. Though there is still a risk of this happening, the chances are becoming lower by the day. Also, gone are the days, whereby the exchange is a scam. Customers in the past have been tricked into signing up to an exchange to then find out the operators have fled with the coins.

Today, you will find the vast majority of exchanges have strong security protocols. They have the tools to repel hack attacks, and they have size and history of operating in other US States for customers to know they a legit exchange.

Each exchange should therefore be consider on their size, exchange controls and insurance. The larger exchanges tend to have better protection. But at the same time, some exchanges which have invested greating with their IT have layers of protection that their customers can use. For example Two Factor Authentication and whitelisting IP addresses. The best exchanges will also have insurance policies to compensate any losses from a hack. This peace of mind if great for customers, however, take note that this insurance does not cover individual losses (such as losing the keys to your walllet). An exchange that has insurance is generally ranked higher than those without.

📞 Customer Support

The fact that there is no clear licensing framework in Masschusetts, makes Customer Support ever more important. Without an avenue in Massuchusetts to lodge a “complaint” against an exchange through a state department, the customer is at the mercy of the exchange to resolve any issues. Customer Support is poorer at low trading fees exchanges, whilst is better at higher trading fee exchanges. This is a generalisation, however the low trading exchange try to cut costs down, and the easiest way to do that is to reduce the Customer Support expense.

Customer Support is also vital for KYC. It you have a complex business structure that you want to use to buy bitcoin, you may find that KYC is onerous and unsupported by many exchanges.

💳 Payment Methods

After signing up to an exchange, you will need to make a deposit. Exchanges will offer various ways to make a deposit, the common method being Wire Transfer and ACH. The second most common way is with debit cards (and some accept credit cards though not many). Some exchanges will also accept PayPal, GooglePay, ApplePay and other e-wallets.

Merchants fees are often transferred to the customer to incur by the exchange. Hence bear this in mind when selecting a payment method.

🪙 Cryptocurrency Selection

If you are buying bitcoin for the first time and you don’t have any other crypto, then you will need to select an exchange that accepts fiat currencies and can use it to exchange for bitcoin. Also consider that concentrating all your investment into one coin is not the safest option. Many traders will diversify their investment and spread across several coins. Hence, an exchange that supports a wide variety of coins will add to the convenience of trading.

🏷 Coupons and Discounts

Cryptocurrency exchanges in Massachusetts often use promotions and referral commission to help drive new customers to their exchange. Though this might be a great aspect to consider, the perk of a coupon or referral commission is nominal at best. There are other aspects to consider which should be placed higher on the list.

A coupon may entitle to you to $50 in discounts. It’s not small, but in the scheme of things, it’s not that large either. Coupons can be found on promotional review sites. You enter the code upon signing up, after which your account is credited.

Referral commission is slightly more worthwhile, with some exchanges returning to you a percentage based on volume and dollar value of someone whom you introduce to the exchange.

Beaware: Sometimes you will receive unsolicited emails informing you of a great new exchange to sign up to. These emails are potentially leading you to a scam site, and may also contain malware (computer viruses). Do NOT sign up and subscribe to these emails.

💰 Fees

Every exchange charges their users differently. Some have a tiered structure while other take their fee from the spread. Comparing exchanges isn’t easy when there is no standardized approach to fees. But in comparing, we can take the most common method which is a percentage of volume traded.

The percentage is usually less than 1% per transaction for the low trading exchanges and reduces further if trading volumes significantly increase.

In addition to fees on trading volume, there are fees on the methods of deposit and withdrawal. For example, if a credit card is used to depost, the merchant provider may charge a fee to the exchange, which is passed on to you. Assess these fees as well, when choosing an exchange.

⚙️ Platform Reliability

This point refers to an Exchange’s ability to remain functional even at the time of maintenance. The exchange should be protected against bugs so that it can run glitch free. But be prepared for outages that will happen from time to time. All exchanges will experience this, and is necessary when a weakness in security has been detected and an immediate fix is needed.

But it’s not just the infrastructure that needs maintenance. Mobile apps also need to be reliable and not crash. Some mobile apps have been known to constantly break, requiring Customer Support to resolve.

📈 Liquidity

A liquid market is a good market. High liquidity means that there are plenty of buyers and seller who want to exchange bitcoin. The more users on an exchange, the higher chance of an exchange price being met. As a customer, you ideally choose an exchange with high liquidity in order to faciliate an exchange of USD for bitcoin. The lower the liquidity the less change of an agreed price being met between buy and seller.

Massachusetts Bitcoin Exchange Reviews

Considering the above criteria, the following is a review of several bitcoin exchanges for Massachusetts.

Binance.US

Binance.US is available in Massachusetts, which is fantastic because it is widely regarded as one of the best and useful exchanges to use. It’s fees were the lowest (now slightly edged out by FTX.US), has a secure and safe IT trading platform, highly liquid with many buyers and sellers, and above all is trusted.

The number of hurdles Binance.US has had to go jump to become an accepted cryptocurrency exchange in the US has been extraordinary. Its history stems from Binance (International), which is owned by a Chinese Canadian National Chaopeng Zhao (CZ). Due to the possibility of foreign interference, Binance was not allowed to established operations onshore. Thus, Binance.US was created. A completely separate entity with unrelated ownership, BUT it leverages the existing IT platform.

Due Federal laws financial services products that are available on Binance, are NOT available on Binance.US. In addition, the support cryptocurrencies are slightly less.

Still, Binance.US is a top quality exchange for Massachusetts. It remains among the most popular. Whether you are new or experienced to buying bitcoin, Binance.US should be an exchange that you strongly consider signing up to.

Cryptocurrencies: 64
Mobile App: iOS and Android
Fees: 0.1% – 0.5%
Payment Methods: Debit Card, ACH, Wire Transfer

BlockFi

* Update: From February 14, 2022 the BlockFi Interest Account (BIA) is closed to new customers from the US.

You may not have heard of BlockFi as an exchange, but perhaps as a bitcoin banker. Its prominence is as a bitcoin deposit and lender. Depositors of bitcoin at BlockFi are able to earn up to 10% p.a. This healthy return to depositors has seen BlockFi continue to grow, hence in the past year it has launched its own cryptocurrency exchange.

Given it is relatively new to the cryptocurrency exchange industry, we recommend allowing it time to mature before signing up. Having said that, it’s features are very good.

BlockFi offers an online wallet (BlockFi Wallet) that can connect directly to its exchange. Link it to your bank account (ACH), and trading can be performed seamlessly and instantaneously. Safeguard your account with 2FA and your personalized approved IP address that are allowed to make deposits and withdrawals.

Also very handy is the tax reporting to its customers. A 1099MISC or 1099B report is available, containing transaction details that the IRS needs.

Payment Methods: ACH
Mobile App: iOS and Android
Fees: embedded in the spread

CEX.IO

As a sophisticated trader, CEX.IO will meet your needs. A global player, supporting over 100 cryptocurrencies with over 4 million customers worldwide. Liquidity is not an issue when trading on this exchange, plus you can go crazy with using its real time charting and copious analytical reports. For the beginner, yes it might be overwhelming, but once you sign up, you will quickly get the hang of it.

CEX.IO is well known for being trusted, safe and secure. Fees are reasonable, but aren’t as competitive as the low budget exchanges.

Cryptocurrencies: 100+
Mobile App: iOS and Android
Fees: 0.15% – 0.25% + deposit and withdrawal fees
Payment Methods: Debit Card, Credit Card, ACH, Wire Transfer

Coinbase Pro

Coinbase is the leading cryptocurrency exchange in Massachusetts. However, there are other exchanges who are marketing heavily to take its marketshare. Coinbase is well established, got great features plus has low fees. This combination resonates well with bitcoin buyers because it meets most of the attributes for a good exchange.

Fees – the fee structure is complicated. It’s not easy to determine and compare with other exchanges, but in general the fees are low.

Instant Buy – for those who want bitcoin in a hurry. Coinbase as an Instant Buy feature. It costs more to process, however, the exchange is not too bad (although still worse that normal tradining).

Bitcoin Debit Card – The Coinbase BTC Debit Card is convenient to use and can earn loyalty rewards. Keep balances minimal for safety and security purposes, and top up when you need to.

Customer Service – Has been know to suspend some account users due to “suspicious activity” without reason. Also sometimes lack support for processing KYC for business accounts, leading to customer frustration.

Cryptocurrencies: 96
Mobile App: iOS and Android
Fees: 0.5% – 4.5%
Payment Methods: Debit Card, Credit Card, ACH, Wire Transfer

Coinmama

If you are starting out and looking for an exchange that will lead you through buying your first bitcoin, then consider Coinmama. This exchange is the easiest to use, without the complexity of other exchanges. The layout and design is not crowded with other financial products or analytics which will often confuse someone who is new.

The customer support is 24/7, with a great knowledge base that contains educational guides. Unfortunately the fees are slighly higher than other exchanges.

Cryptocurrencies: 96
Mobile App: iOS and Android
Fees: 0.5% – 4.5%
Payment Methods: Debit Card, Credit Card, ACH, Wire Transfer

Crypto.com

Crypto.com (CDC) is a big name market maker in the US and in Massachusetts. Their marketing budget is huge with employing the likes of Lebron James and Matt Damon as brand ambassadors, and also acquiring the naming rights to LAs previously named Staples Center (the home of the LA Lakers).

But does the marketing reflect the quality of their exchange?

There is no question that the platform is one of the most reliable, safe and secure. Having said that, the mobile apps (available on both iOS and Android) have been known to be a bit glitchy. Jokingly, some say it still is the best crypto mobile app available, because a quick uninstall – reinstall seems to do the trick.

The exchange is easy to use, yet is powerful with a lot of graphics, charting for the technical traders. The benefit of trading often on Crypto.com is that you earn CRO, the native coin of Crypto.com.

In addition, as a frequent user of bitcoin, you can apply for the Crypto.com metal flashy debit card. Unlike the plastic credit cards that are associated with VISA and Mastercard, the Crypto.com is truly made of metal and weighs a ton. If you can put up with have a heavy wallet and push aside the gimmicky metal, you can earn great rewards with using the card for daily purchases.

Cryptocurrencies: 96
Mobile App: iOS and Android
Fees: 0.5% – 4.5%
Payment Methods: Debit Card, Credit Card, ACH, Wire Transfer

Etoro

Etoro is a wordwide leader for exchanges, have a reach that is beyond US alone. A global big name and attempting to build a strong hold in the US. Before the advent of cryptocurrency, eToro was a leader in foreign currency exchange (and still is). As a natural extension they know include cryptocurrency as part of their pairings.

eToro touts that their trading fees are “zero”, which is true. However they earn their income, is through the widen spreads. Hence, if you use eToro do not be surprised that the spreads are worse than other exchanges.

Cryptocurrencies: 27
Mobile App: iOS and Android
Fees: zero (but huge spreads making eToro more expensive than Binance.US and Coinbase).
Payment Methods: Wire, ACH, PayPal, e-wallets

FTX.US

FTX.US (similar to Binance) has had to create a separate entity from its parent FTX. This has been confusing for some customers, because they share the same mobile app! Or do they? There is some conectivity between the two, however, this is where the confusion lies, particularly for those customers who have been able to create a FTX.US and FTX account.

For those of you in Massachusetts who is signing up only to FTX.US you need not worry about clashing the two together. FTX.US has the lowest trading fees at the moment, offset by possibly the worse customer service. If you intend to set up a personal account, which is the easiest account to establish then we strongly recommend FTX.US. However if you intend to set up an account for a more complex structure, or even if you intend to trade “suspiciously”, then FTX.US may not be for you.

In addition, the supported cryptocurrencies is only a 20, but they are looking to expand this further.

The platform is very good, with the exchange design and features customized for user experience.

Choose FTX.US if you are looking for the lowest trading fee exchange to use.

Trading name: West Realm Shires Services Inc
Cryptocurrencies: 20
Mobile App: iOS and Android
Fees: 0.4% – 5.0%
Payment Methods: Wire, ACH, PayPal, e-wallets

RobinHood

RobinHood is a share trading and cryptocurrency exchange all rolled into one. It became famous (or infamous) with the pump and dump strategy of its users in March 2021. As a result of these activities, RobinHood has been targeted with a law suit by Massachusetts regulators for breach of licensing.

Though Robinhood is one of the cheapest exchanges to use, and continues to be available in Massachusetts, we strongly recommend avoiding signing up to RobinHood.

Bitcoin ATMs

There are over 650 bitcoin ATMs in Massachusetts, mostly centered in Boston. Bitcoin ATMs are an easy way of buying bitcoin, super convenient and with cash. But take note that the fees are horrendously high when compared to an online cryptocurrency exchange.

Bitcoin ATM operators include: Bytefederal, Coinflip, Coinsource, DigitalMint, BitconDepot, Bitcoin of America, Coinmover, CoinCloud, BitcoinX, RockITCoin, PayDepot, CryptoDispensers, GetCoins, National Bitcoin ATM, PureCoin, BitBox.

Massachusetts Cryptocurrency Tax Ruling and Rates

Buyers and sellers of bitcoin in Massachusetts are required to pay tax to the IRS on any profits. The IRS requires disclosure of bitcoin transactions, submitted in the form 1099MISC/B.

Some exchanges have tax reports which will help you with your tax submission and can even be integrated to tax software.

The above information is not financial advice or tax advice. Please seek the services of a qualified tax professional when calculating tax for cryptocurrencies.

Bitcoin Cryptocurrency Laws and Legislation

State Licensing

The crypto laws of Massachusetts are not as progressed as other US States. The State’s Money Transmitter Act does not make reference to virtual currencies and therefore, within the State cryptocurrency exchanges are not required to obtain a license. In addition no guidance by the Massachusetts’ Division of Banks has been issued, thus allowing cryptocurrency exchanges to accept customers freely.

State Sales Tax

In regards to state taxes on the sale of goods and services, Massachusetts has passed into law the inclusion of virtual currencies in relation to market facilitators. This was introduced with SB 1762 “An Act related to the marketplace collection of sales tax.” Any vendor that uses a virtual currency can qualify as a marketplace facilitator for sales tax purposes.

Bitcoin ATMs

Bitcoin ATMs are not regarded as Financial Institutions. See Chapter 167B Massachusetts General Laws and guidance per Office of Consumer Affairs and Business Regulation.

Unlike foreign currency exchanges which do require a money transmitter license, bitcoins provided through ATMs are not categorized as the same, and therefor do not need a money transmitter license.

Advancement of Blockchain Technology

The Massachusetts Senate (SB200) has intiated the study of blockchain technology in the state for use of government records, court proceedings, corporate records, voter and election voting and results, state registries and tax transactions.

Bitcoin and Cryptocurrency Wallets

Some exchanges also offer wallets. It’s not necessary for a good exchange to offer a wallet to their clients, though it can be a nice to have for new investors. However, be aware that online wallets offered by exchanges are normally hot wallets. That is, these wallets are connected permanently to the internet. This can be quite risky to use a wallet that is controlled by the exchange and not by yourself.

Hence it’s not necessarily a good thing if an exchange offers a wallet, but it’s a nice to have, if you are looking for an exchange with their own wallet.

Online Wallets: Every crypto-exchange has their own wallet where traders can store their coins or cryptocurrencies for as long as they want. However, there are two types of these wallets that traders have to decide about which wallet they want to use for their trading.
Massachusetts Hot Wallets: Since the inception of bitcoins and other cryptocurrencies, wallets have been transformed and divided into two forms- desktop and online. Digital wallets are free and can hold any cryptocurrency that traders want. They enable them to get easy access to their cryptocurrencies via mobile devices. They are perfect for beginners who want something easy to start with.
Massachusetts Cold Wallets: These specifically designed devices work as physical cryptocurrency storage that allow traders to bring their cryptos with them, no matter where they are going. Though, the only considerable thing is their expensive nature with limitations of storing certain cryptocurrencies for future use.

Minimum Legal Age

The minimum legal age to buy and sell bitcoin in Massachusetts is 18 years of age.

Summary

It is legal to buy and sell bitcoin in Massachusetts, even though State laws have not formally included virtual currencies in the definition of a money transmitter. The lack of guidance, does not impact an individual, but rather it is more relevant to corporates who wish to operate a cryptocurrency exchange. Foreign entities, however, must register with the State Division of Banking, while local cryptocurrency exchanges do not have to.

The best bitcoin exchanges in Massachusetts have a balance between low trading fees, customer support, liquidity and reliability of platform. When buying bitcoin, it must be stored on a wallet, either online via a third party, on software or hardware which can be either cold or hot.

The legality of buying and selling bitcoin has yet to further develop in Massachusetts. However, RobinHood has been taken to court for breach of licensing.