Florida Judge Rules Bitcoin Isn't Money in Landmark Case
If you’ve been paying any attention to the news for the last several months, you’ve probably heard quite a bit of noise about this thing called “bitcoin.” Bitcoin is one of thousands of different types of cryptocurrency, a type of money that has no physical form and is used expressly in electronic financial transactions. It’s easy to see the appeal of bitcoin: it’s not connected to any single government, it has no physical form that can be traced, and recently has become extraordinarily valuable.
However, one Florida circuit court judge has recently made a decision regarding bitcoin that came as a shock to many and is expected to have wide-reaching consequences on criminal charges brought against those who use bitcoin in online transactions in other states as well. Judge Teresa Pooler recently dismissed a case brought against Michell Abner Espinosa who was caught in a sting operation attempting to sell a quantity of bitcoins to federal agents in exchange for $30,000.
During the sting operation, the agents told Espinosa that they intended to use the bitcoin to purchase stolen Russian credit card numbers. Florida’s laws are written in such a way that they prohibit financial transactions where the transaction would “promote” illegal activity, and that doing so could be charged with money laundering.
The agents, who were acting on a hunch that Espinosa was involved in nefarious activities due to his willingness to trade in bitcoin and ready availability, actually made several purchases with him over the course of a long sting operation before the final big-money operation. Espinosa’s attorney argued that the stated intentions of the people who he did business with were none of his concern—he was only in business to buy and trade in his preferred cryptocurrency, which as far as laws are currently written, is not against the law.
Regulatory commissions have struggled to quantify bitcoin and other cryptocurrencies for regulation purposes. The IRS has declared that bitcoin is taxable as physical property—if you make a profit selling it, then you’ll pay taxes on the profit. The Commodities and Futures Trading Commission has defined the digital currencies as “commodities.”
However, Judge Pooler’s decision may change that, as she declared that Bitcoin is not money. She wrote in her decision: “Nothing in our frame of references allows us to accurately define or describe Bitcoin.” She continued that while bitcoin may share some characteristics as money, such as being exchanged for items of value, but because of that value’s volatility, its ability to store value is limited, thus differentiating it from actual money.If you’re accused of wire fraud, money laundering, or any other offense that could be associated with Bitcoin and other forms of cryptocurrency, call the Bergen County criminal defense attorneys at Brickfield & Donahue at (201) 574-7919 today.