Florida Judge Overturns Ruling That Bitcoin Isn’t‘Money’

Esther Kim |Jan 31, 2019 | 10:00

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A Florida appeals courthas overturned a ruling that acquitted a Localbitcoins trader ofmoney laundering and working as an unlicensed money transmitter.

Bitcoin No Longer ‘Poker Chips’?

As local news outlet MiamiHeraldreportedJanuary 30, Michell Espinoza, who sold bitcoin worth around $1350 toan undercover police detective in 2014, will now face a jury.

Prosecutors argue Espinozashould have registered as a money transmitter before advertisingservices on P2P trading platform Localbitcoins.A settlement in 2016 threw out the charges after a judge agreedBitcoin was not legally money.

“Basically, it’s poker chipsthat people are willing to buy from you,” a defense witness said incourt at the time.

The Third District Court of Appeal,however, has other ideas.

“Espinoza’sbitcoins-for-cash business requires him to register as a paymentinstrument seller and money transmitter,” the Herald quoteslawmakers as saying Wednesday.

A trial date has not yet materialized.

Setting A Precedent

Espinoza’s case was complicated bythe fact that the undercover officer told him he planned to use thebitcoins to buy hacked data.

Nonetheless, the implications ofa potential successful conviction are significant. The case couldallow law enforcement to prosecute more Localbitcoinstraders if there is a reason to suspect they are engaging in“business” and not sales of “private” bitcoin holdings.

The U.S. has strived to enshrineobligations surrounding taxation and securities in law forcryptocurrency issuers and holders, but the national landscaperemains patchwork.

As Bitcoinistreported, individual states have taken markedly different approachesto cryptocurrency, ranging from openly accepting to openly hostile.

Such is the headachefor some businesses looking to serve the US market, exchangesincluding Bittrex and Coinbase have opted to segregate their domesticand non-domestic audiences by setting up entirely separate platforms.

In December, a bipartisan billappearedin Congress aiming to exempt cryptocurrencies from securities law.