Bitcoin is not money, according to a Florida judge.
Advertisement
They are certainly not tangible wealth and can not be hidden under a mattress like cash and gold bars. The cops told Espinoza they wanted to use the bitcoin to purchase stolen credit-card numbers and, when he complied, charged him with money-laundering.
However, Judge Pooler ruled Bitcoin doesn’t count as money due to the fact it isn’t officially recognised by banks or the USA government.
For the money laundering charges, the law states that it’s illegal for an individual to conduct a “financial transaction” with money that a law enforcement officer says came from an illegal activity.
After purchasing bitcoin from Espinoza on three occasions, the detective asked to purchase $30,000 worth of virtual currency.
Espinoza was arrested along with Pascal Reid, who has since plead guilty to acting as an unlicensed money broker.
Copyright 2016 CBS Broadcasting Inc.
Moreover, Pooler struck down the state’s contention that Espinoza could have acted as an unregulated “payment instrument seller” by citing the IRS’s own categorization of bitcoin as property. “At this time, however, attempting to fit the sale of bitcoin into a statutory scheme regulating money services businesses is like fitting a square peg in a round hole”.
“The court is not an expert in economics, however, it is very clear, even to someone with limited knowledge in the area, the Bitcoin has a long way to go before it the equivalent of money”, Pooler wrote.
Sorry bitcoiners, the U.S. court system doesn’t think your digital currency is real money. At some point state and federal lawmakers (and even those in other countries) are going to have to sit down and write a stricter definition of Bitcoin that will remove any ambiguity on whether or not it should be classified as currency or property.
Bitcoin can be spent anonymously in some cases and also purchased and sold on exchanges with many currencies, including the United States dollar.
The case resulting in Monday’s decision was being closely monitored by tech, finance, and legal circles in light of the growing popularity of Bitcoin in recent years, according to the Miami Herald.
Cryptocurrencies have no material form and global currency regulation does not apply.
Espinoza’s attorney, Rene Palomino, called the judge’s decision “beautifully written” and said: “At least it gives the Bitcoin community some guidance that what my client did was not illegal”.
Barry University economics professor Charles Evans supported the idea that bitcoin is not actually money.
Advertisement
“Basically, it’s poker chips that people are willing to buy from you”, said Evans, a virtual-currency expert who was paid $3,000 in Bitcoins for his defense testimony.
