If you are 18 years or older, you can legally buy bitcoin in Vermont through state regulated cryptocurrency exchanges.
A snapshot of Vermont Cryptocurrency Market:
- It is legal for residents of Vermont to trade in cryptocurrencies
- Investors, buyers and sellers must be at least 18 years old
- One of the strictest states enforcing regulation
- There are only a handful of Vermont State “Licensed” bitcoin exchanges to choose from.
In this article we explain which bitcoin exchanges to use and to avoid, the legislation at a State level, and other important tips and tricks to guide you with investing in cryptocurrencies.
If you intend to trade and invest in Bitcoin and Cryptocurrencies in Vermont, then we highly recommend the following exchanges:
Top 5 Vermont Bitcoin Exchanges
Overview of Vermont Bitcoin Exchanges
Buy and selling Bitcoin through a licensed Vermont exchange is the most common and the easiest way. An exchange provides a convenient way to quickly buy and sell, it’s also the safest and secure. Of course there are many other ways that you can buy Bitcoin.
- Buy direct from a Seller without a broker
- Work for Bitcoin
- Mine Bitcoin
- Bitcoin ATMs
While there are several cryptocurrency exchanges available in Vermont, there are some important factors to be considered.
We discuss them per below:
🔒 Safety and Security
Safety and security is important for user and exchange
During the early years of bitcoin, cryptocurrency exchanges were making headlines for being hacked, operating as scams and/or falsifying liquidity. But things have changed dramatically, and exchanges are now meant to be, at the very leasst, Federal licensed and regulated. In Utah, the state has deemed that no cryptocurrency exchange is required to obtain a Money Transmission license. This means, the market is open to any exchange that is SEC approved.
Exchanges have also improved their technology to be more secure. Strengthening infrastructure, putting in place better procedures, but also offering users functionality to protect user access and authorized transaction limits.
No exchange, however, can protect against a user’s carelessness of revealing passwords or losing keys. Nor can the State prevent users from mistakenly signing up to scams.
Weigh up safety and security. Though it has improved, it should still be at the forefront of consideration.
📞 Customer Support
Prompt, Accessible and Professional
You will find that Customer Suppport will be needed more times than you would think. Some users will need support going through the KYC process, some will need it to trade, and others will just have general questions about the platform.
Customer support needs to be accessible, whether it be through Live Chat, email or a hot line. It also needs to be prompt and accurate. Some customer support is AI driven. Useless if you have a specific question or need help urgently.
Customer Support is also supported with Self Help Centers – information portals with guides, procedures and rules. These self help centers are meant to be useful, easy to read and comprehensive. The low trading fee exchanges tend to push their Customer Support towards Self Help Centers. It’s one way of saving costs in an effort to allow for low trading fees.
In knowing this, you may find that low trading fee exchange, compromise on their Customer Support. Bear this in mind when choosing an exchange with low trading fees vs Customer Support.
💳 Payment Methods
Make sure your Payment Method is available
Many of the top Utah exchanges will offer the common US payments – ACH, wire transfers. Some will accept debit cards but with limits. Credit cards are much harder to come by, because many financial institutions will not facilitate it (even though it is lawful). Finally, there are very few that will also accept PayPal, Skill and Neteller.
The no frills exchanges may only accept one or two types of payment methods. This doesn’t necessarily mean that the exchange is bad, as long as you are willing to use the payment methods that they offer then there are no issues.
Payment methods are often sought by users for first and foremost Credit Cards. They want to use loyalty points on their cards to access greater rewards. The second most sought after payment methods, are the cheapest ones. Some payment methods will incurr a fee by the exchange which is passed onto the user. Each exchange will have a different fee for their payment methods that they offer.
🪙 Cryptocurrency Selection
Spread your investment
There are two aspects to cryptocurrency selection that should be considered. First, is the diversification benefit that can be obtain by buy several cryptocurrencies outside of bitcoin. Diversification is a common strategy among investors to spread their risk. This reduces volaility.
Secondly, some top exchanges have their own native coin. For example Binance and Crypto.com. With these exchanges, you will be rewarded with native coin, which could go up in value. The more users who join these exchanges, the more liquidity with the native coin.
These benefits should not be overlooked when considering an exchange.
🏷 Coupons and Promotions
Refer a friend and Claim Discounts
Based on their common purpose, coupons and promotions are intended to create a win-win situation by attracting more and more clients to start trading with them. For a good cryptocurrency exchange, these offers work as a marketing tool where they can reach maximum number of people and expect to get at least 50% responses within no time. traders are rest assured of getting discounts or reductions in transaction fees.
💰 Fees
Trading, Deposit and Withdrawal
Fees can be incurred as trading fees, on deposits or withdrawals. They can also be hidden in spreads, deliberately widened so that the exchange can take a cut.
Fees are very hard to compare from exchange to exchange, because there is no standardized fee calculation. For trading fees, the most common method of calculation is a tiered approach based on volume and dollar amount. The tiers may be complex or simple and can have conditions.
Deposit and withdrawal fees can differ based on the method. Different methods may require merchant providers to facilitiate, whom in turn charge a fee, and the exchange may then impose their own administration fee.
Beware that some exchanges will purport to have “zero” exchange fees. This is not possible. The exchanges with zero fees, have wider spreads when buying and selling bitcoin. The wider spreads (which are worse for users) encapsulate a cut for the exchange. This is how the exchange earns an income on the exchange.
The total and absolute fee that a user will incur is therefore difficult to ascertain. But the most popular low trading fee exchanges are FTX.US and Coinbase Pro (Binance.US is not available in Vermont). These exchanges have fees starting as low as 0.4%.
⚙️ Platform Reliability
Limited downtime, glitch free
The vast majority of exchanges are built on reliable platforms that are easy to use, interface well and don’t crash. But, as part of the licensing, they are required to continually improve their system controls, reliability and IT infrastructure. Occassionally, they will need to shut down their platform for maintenance which includes fixing bugs, upgrading software, adding new features. At most, a shut down will not last more than a day, and will occur outside of normal working hours.
For the vast majority of buyers of bitcoin who are long term traders, platform reliability is an important attribute but not as important as others that we have mentioned.
📈 Liquidity
More buyers and sellers equals more liquidity
Without good liquidity it is hard to be able to sell, liquidate the earnings (or losses). It is important to have liquidity, if not then it could become a problem. Liquidity comes and goes. This is the same for any tradeable asset, like stocks. Trading in stock volumes increase and decrease seasonal and also broadly in alignment with how well the economy is performing.
A low volume exchange has risks that are two fold. One, you will need to bide your time in order to sell for the right price. Low volumes will make this difficult, and especially if you urgently need to sell this could cause you to lose some of your profits. Secondly, a low volume exchange is prone to market maniuplation. The larger holders of the coin, could possible move the market, but it more than likely causes volume voliatity on the exchange.
Setting Up an Account
To buy bitcoin from an exchange, you will need to set up an account. The process varies slightly between each of the exchange platforms, but ultimately you will need to go through a KYC (Know-Your-Client) process.
A KYC process is a mandatory requirement by all licensed exchanges in Utah. They need to perform this verification, to prevent money laundering and to meet AML (Anti-Money Laundering) international regulations.
The KYC will normally ask for your person details, proof of identity in the form of utility bills, drivers license or passport and social security number. Some exchanges may ask for more information.
Once your KYC has been processed your account will be activated. Now send whatever amount of money into it that matches how much fiat currency you’re willing to spend on bitcoin.
Send your US dollars through a payment method such as a bank transfer and then sit back and wait until it arrives in your exchange wallet — which could take several days depending on how busy they are.
Vermont Bitcoin Exchange Reviews
We review the following selected Vermont bitcoin exchanges in alphbetical order.
Binance.US – Not Available
Although we have included a review of Binance.US on this list, at the time of writing, Binance.US is NOT available to Vermont.
Binance.US is one of the most popular exchanges in the US, but is sadly not licensed in Vermont and therefore cannot cater for local residents.
One reason for its popularity is the low fees. The trading fees and narrow spreads are among the lowest which is attractive for a regular buyer of bitcoin. Liquidity is probably the highest, so you will not find any better exchange for a quick bitcoin buy.
Another reason that Binance.US is popular is its native coin BNB. Users are rewarded with BNB for using the exchange, and BNB itself can also be traded. Creating an extraordinarily worthwhile investment.
Lastly, personal accounts can be established and verified within an hour. A no hassles quick start for the buyer who is in a hurry.
In summary, Binance.US is a trustworthy exchange to use to buy bitcoin. The pro’s certainly outweigh the con’s and certainly exceeds in comparison to other exchanges.
- Money Transmitter License: None
- Cryptocurrencies: 64
- Mobile App: iOS and Android
- Fees: 0.1% – 0.5%
- Payment Methods: Debit Card, ACH, Wire Transfer
BlockFi – Avoid
** Update – Feb 2022 – Vermont has issued one of the largest penalties against BlockFi to date. Together with several other US States and the SEC, the total penalty is approximately $100 million. As a result, we DO NOT RECOMMEND signing up to BlockFi.
Not many users have heard of BlockFi as an exchange, but they may know of it as a deposit/lender of bitcoin. Offering a good interest rate, for those who don’t want their bitcoin just sitting on their wallet being idle. On the flip side, you can borrow bitcoins from BlockFi, if you want to leverage or need it for business transactions.
It have recently launched an exchange to compliment their deposit and lending facility. The exchange is still in its infancy, only accepting ACH transactions and fees are “zero” which means they are embedded in the spread. Lack of transparency of fees is concerning, with many user prefering low trading fee and narrow spread exchanges.
BlockFi may turn out to have a great exchange. But for the time being perhaps give this one a miss.
- Money Transmitter License: Not Licensed
- Payment Methods: ACH
- Mobile App: iOS and Android
- Fees: embedded in the spread
- Crypto: Only supports crypto pairs
CEX.IO
A beast of a cryptocurrency exchange that truly is a powerhouse for the sophisticated traders. Lots of features that will help analyze market trends, trading patterns and other important bitcoin signals. CEX.IO offers well over 100 cryptocurrencies to choose from. The fees are relatively low, and they accept several deposit and withdrawal options that are common for Illinois residents. Their platform is reliable and stable, even though it is function heavy. A good cryptocurrency exchange for the experienced bitcoin trader.
- Money Transmitter License: 100-139
- Card: VISA Card holding Bitcoin
- Mobile App: Available on iOS and Android
- Wallet: CEX.IO Wallet
Coinbase
This exchange is one of the most popular in the world, alongside Binance. It not only supports the buying of bitcoin, but includes all the other major altcoins such as Bitcoin Cash (BCH), Litecoin (LTC), and Ethereum (ETH). In regards to fiat currencies, it extends to U.S. dollar (USD), the Euro (EURO), and the British pound (GBP). Coinbase has obtained a licensed with the Illinois Department of Financial and Professional Regulation.
- Money Transmitter License: 100-076
- Card: Coinbase VISA Debit Card and can link to Google Pay and Apple Pay.
- Mobile App: Available on iOS and Android.
- Wallet: Coinbase Wallet
Coinmama
Coinmama is a simple no frill cryptocurrency platform that is great for beginners. The range of trading options is limited to 10 cryptocurrencies, but the good thing is that there are no deposit or withdrawal fees. Coinmama is one of the best exchanges for bitcoin buyers who are just starting out.
- Money Transmitter License: N/A
- Card: None
- Mobile App: None
- Wallet: None
Crypto.com (CDC)
Crypto.com is splashing out with marketing to become the biggest exchange in Vermont. Joining forces with the well known basketball player Lebron James and the movie star Matt Damon, you will definitely see lots of promos. Crypto.com is now also the name of the LA sport stadium that used to be called the Staples Center.
Looking beyond its marketing campaign, Crypto.com is an exchange that offers many perks, and excellent trading experience. One of the perks is being rewarded with the native coin CRO. The more you use Crypto.com the more CRO you can earn.
CRO can also be traded, just like any other cryptocurrency. Hence, there is a lot of upside with trading on Crypto.com.
Crypto.com offers a fantastic debit card made of metal. It is widely accepted, but undoubtedly heavy. To be honest, it is very gimmicky, and could be a good talking point at a party, but it still is just a debit card, i.e. the functionality is the same as any other.
The app is sturdy, robust and mostly glitch free. If there are any issues, users have found by simply uninstalling and reinstalling the app, it begins to work smoothly again. Trading fees are among the lowest, though spreads are just ok. As Crypto.com grows, we expect to see better spreads.
- Money Transmitter License: N/A
- Cryptocurrencies: 96
- Mobile App: iOS and Android
- Fees: 0.5% – 4.5%
- Payment Methods: Debit Card, Credit Card, ACH, Wire Transfer
eToro
eToro is perhaps more well known as a foreign currency exchange, but has naturally expanded to support cryptocurrency. Leveraging from its existing platform, it has features that not many other cryptocurrency exchanges offer. A great exchange for the sophiscated trader, but at the same time also caters for the newbies. Customer Support is very good, which includes a library of content that is helpful and practical.
- Money Transmitter License: 100-126
- Card: eToro Money Card linked to eToro Money Account
- Mobile App: Available on iOS and Android
- Wallet: eToro Wallet
Kraken
One of the pioneers of cryptocurrency exchanges, launched in 2011 and first began trading of bitcoin in 2013. During the early years, Kraken was the target of several publicized hacks, resulting in the theft of bitcoin. Since, these early days, Kraken has strengthened its safety and security to become compliant with US Federal regulations.
Platform reliability has been average, with 48 hours of down time on the January 10, 2018 for an upgrade that was originally for 2 hours.
Though there have been some issues during Kraken’s history, this platform is highly regarded and is backed by many institutions. At an approximately valuation of $5 billion, Kraken is one of the largest global bitcoin exchanges to trade on.
- Money Transmitter License: N/A
- Card: None
- Mobile App: Available on iOS and Android
- Wallet: Kraken Online Wallet (not a personal storage wallet)
LocalBitcoins – Peer to Peer Exchange
Known for providing an escrow service, this cryptocurrency platform enables clients to find the right buyers for their Bitcoins. Although advertisement is a good option to go with, many have not received the required level of responses. The thing that makes LocalBitcoins different from others is the in-person meeting, which is facilitated and secured by LocalBitcoins have turned out to the fastest platform to acquire Bitcoins within a few minutes.
Bitcoin ATMs
With the help of Bitcoin ATM, it’s quite easy for potential investors to buy bitcoins whenever they have enough funds available. They make the process so quick and easy that traders used to wonder whether things have been done properly or not. It is worth mentioning that Bitcoin ATMs charge between 5% to 10% fees against providing privacy, security and convenience of keeping personal and other details in private. This fee is literally worth the features traders will be getting.
Vermont Cryptocurrency Tax Ruling and Rates
Vermont residents are subject to paying tax according to the tax rules imposed by the IRS. The buying, selling and exchanging of bitcoin is regarded as a financial asset that can result in capital gains and losess and tax on earnings. This treatment is exactly the same as purchasing foreign currencies either as an investment or to transact.
Capital gains and losses are only taxable upon realization, i.e. once bitcoin has been converted back into USD or to another fiat or cryptocurrency. It can also be realized if bitcoin is used in a transaction, i.e. it has been used as an exchange for goods and services.
IRS requires tax documentation to support the trading of bitcoin. Many cryptocurrency exchanges now currently provide tax reports to assist US residents with tax submission to the IRS.
Bitcoin Cryptocurrency Laws and Legislation
https://legislature.vermont.gov/statutes/fullchapter/08/079
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.
- Vermont 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.
- Vermont 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 for buying and selling bitcoin in Vermont is 18 years old.
Summary
In Vermont there are various ways to buy bitcoin. The most common is via cryptocurrency exchanges. Cryptocurrency exchanges are not required to be licensed per the amendment to the Money Transmission Act in 2019.
Whenn selecting a cryptocurrency exchange consider how it fits the investment strategy. A good balance of fees, safety and security, platform reliability, liquidity, supported cryptocurrencies and payment methods is often sought after.
In addition to buying on a cryptocurrency exchange, bitcoin can be bought at ATMs, through the exchange of goods and services or mining.
After purchasing bitcoin, a wallet is needed to store it. The keys to the wallet are vital in keeping safe. There are different types of wallets, each with their pro’s and con’s that should be considered.
Finally, when using bitcoin there are tax implications. The IRS treats using bitcoin the same as foreign currency. If you profit from buying and selling bitcoin, you may need to pay taxes. If you earn bitcoin through the sale of goods or performing services, this may also be taxable.
How to Lodge a Cryptocurrency Customer Complaint
If you have a customer complaint at a cryptocurrency exchange, please raise the issue with them first.
If unresolved, please contact the State Department of Financial Regulation.
Department of Financial Regulation
Banking Division
89 Main Street Montpelier, VT 05620-3101
Telephone: 1-888-568-4547
Email: dfr.bnkconsumer@state.vt.us
Website: http://www.dfr.vermont.gov
https://dfr.vermont.gov/consumers/file-complaint
