Need an explanation as to why the exchange of BTC for USD is legal Many have asked if the exchange of BTC for USD is legal, and they will cry "legal" and simultaneously cite FinCEN's regulations for a MSB. 

However, they never explain if an individual trading BTC for USD (at, say, Mt. Gox or something of the like) is considered an MSB. 

Could someone EXPLAIN why it is legal/illegal for an individual to exchange (not run an exchange, but be the customer) BTC for USD.

Thank you.
Right now Bitcoin is the round peg in the regulator's square hole.  

If Bitcoin is deemed to be a security, then certain restrictions might apply on how it is bought, sold, and held.  But Bitcoins themselves are not a debt, or a promise, or anything similar so it probably isn't a security.  

If Bitcoin is deemed to be a commodity, then certain restrictions might apply on how it is traded, if delivery to the buyer is at some point in the future -- as is the nature of most commodity transactions.

If Bitcoin is deemed to be a foreign currency, then certain restrictions could apply there as well.   FinCEN has explicitly stated that it does not see Bitcoin as a foreign currency.

But almost nowhere is there a restriction about acquiring a good, such as like what Bitcoin exchanges provide.