Bitcoin Forum

http://www.abajournal.com/news/article/judge_rules_bitcoin_isnt_money_tosses_money_laundering_charges/

The Takeaways

• Under cover feds buy Bitcoin from defendant, tell him it's so that they can purchase stolen credit cards
• Feds arrest him for operating an unlicensed Money Services Business (MSB) and money laundering
• Defense argues that Bitcoin is not money, so he cannot be operating an unlicensed MSB or money laundering
• Judge ruled Bitcoin is not money and also that the defendant selling his Bitcoin did not constitute money laundering because he had no intention to promote an illegal activity (purchase stolen credit cards)
• This case is believed to be the first money laundering prosecution involving Bitcoin

Of course he will toss charges. Its hard to believe for me that a country which insists a lot in promoting itself as a Free Country like USA will want to put in jail some person just because he is selling some bitcoin. The agent may wanted to make this a case but Espinoza the guy who sold the coins to a agent undercover have not broke any law in USA. Its without a doubt a right decision from the judge although not an expert in economics. Lastly its funny how the agent wanted to make this a case of money laundering with only 3-4 bitcoin involved which is maximum amount of 3000 USD at the best. This sum is not considered a big one and is was the right decision from the judge to not charge guilty Espinoza for selling such low amount.

I would agree with you, but just because the amount is low ($3,000) doesn't mean the charge is not serious. Money laundering is a serious crime, and the important fact is that the judge ruled that selling Bitcoins was not money laundering in this case, even though he was not registered as an MSB. This also seemed to be a case of entrapment to me, in that the agent tried to get a charge of money laundering by telling the guy he was going to do something illegal with the Bitcoins before the sale took place, thereby trapping the man into a situation he did not try to enter willingly. He was just trying to sell his coins, he has no obligation once they are no longer in his control.

I think there should've been more focus on the idea that what Michell was accused of didn't fit into the current Florida money laundering statutes, not whether or not bitcoins is money.

In my opinion, even if bitcoins were considered money, what Michell was looking to do wasn't money laundering, because there wasn't any evidence presented in the case that showed that he acquired the bitcoins illegally. (Someone who knows the case better than me is welcome to correct me on this.)

My understanding of money laundering is that it's where you take illegally acquired, tainted money, and look to convert it into clean money. There was no evidence that Michell's bitcoins were illegally acquired. The undercover officers staged the transaction to make it look as if Michell was complicit in future crimes that *they* wanted to commit with the bitcoins (credit card fraud), but that's also not money laundering, at least, not Michell's side of the transaction. It's definitely unclear to me, legally, whether *just hearing* someone comment on what they want to do with the money, or property, that they buy from you makes you complicit in *their* future crime.

I believe the judge, during the case, even made a comment about how, if anything, what Michell had been looking to do was more like "reverse money laundering", an activity that isn't in the law.

But it is a form of payment so why would the judge not take that into consideration is beyond me. ::)
So does this mean if somebody who is selling his stock of illegal goods for bitcoin he will have his case tossed out of court just for saying it was not bought with money? :-\

USA has already accepted bitcoin and other forms of cryptocurrency, I don't understand why the judge will say bitcoin is not money.

We've got to be very precise. The judge didn't say BTC wasn't money, but that it isn't the equivalent of money, and that AML regulations aren't applicable to this particular case.

Being equivalent of money is a weird way of saying it.
So if gold was used it would be the same verdict?  ::)
That is just a strange ruling in a court of law if you ask me.

Well at least he got off on a technicality! I'm sure there are others that got 'busted' for the haynes crime of selling bitcoins and didn't get off so easy. There have been a lot of cases of well known users on this forum. Hopefully this helps everyone in the future.

Is this a legal precedent? Can someone explain what this will  mean for the future of Bitcoin?

The judge decision was based in legal laws and policies about money laundering. And his decision was right since there are no laws yet pertaining the use of bitcoins in their area there was no ground to call the suspect guilty.

But maybe in the future there will be policies and bodies that will monitor and regulate the use of bitcoins. And illegal activities that uses bitcoin will be given action[/list]

It's a law court. It sets a precedent, but not one that can be expected to last. Courts of equal stature can look to this decision to be persuasive, but not binding on their own decisions, and it can be overruled by an appeals court. So it is a legal precedent, but not a strong one.

The judge actually did say bitcoin wasn't money. If you read the decision, the judge wrote:


i.e., Bitcoin is not money.

To be considered as money it should be first defined by law as such. So, like the judge said, as a payment instrument. I think that biggest advantage but at the same time also the biggest problem of.Bitcoin is that that is not precisely definedw by law and that gives a lot of space for different interpretations.

It's not necessarily a problem. Bitcoin is used like money. From a practical perspective it is of no importance if any state classifies Bitcoin as money or not - at least for the vast majority of users that use Bitcoin to buy goods and services or buy/sell Bitcoin at the major exchanges.

Trying to stage a money laundering case out of a minuscule p2p Bitcoin exchange does not instill trust in the U.S. executive branch. The judicial decision was right simply due to the fact that you can't launder money of a crime not yet committed.

If you ask me, money laundering should not be prosecuted at all, since it is not directly harming anyone. It is just an indirect way of trying to suppress crime that is not easy to suppress directly. However, by introducing such "secondary crimes" the probability of unjustified convictions rises significantly.

ya.ya.yo!

All right, I hadn't seen that. I guess we agree though, according to your previous post. I'm not giving much importance to that ruling. BTC doesn't fit into the legal description of a payment instrument, but there are more and more people who would gladly accept BTC as a payment.

I disagree with this. Prosecuting money laundering is absolutely essential. Money laundering increases crime by elevating the black market rates of illegal activities, thereby creating more of those illegal activities and the violence that goes with them. If it was impossible to launder funds, the price of black market activities would likely be less because there would be no way to reduce the risk of the transactions afterwards by washing the funds and reintroducing them to the economy. Not to mention that money laundering is an income source that makes it possible to fund some of the most dangerous criminals in the world, including the most violent drug cartels in Mexico and Islamic radicals in the Middle East.

More stupid uneducated judges just making BitCoin look bad.

well we will see how it is not going to be money for him when bitcoin price grows and replaces fiat, then he will have to use it daily for his shoppings

 ;D ;D ;D ;D

People hiding their money from thieving scumbags called politicians... a serious crime? surely not.

Good thing that the guy who was charged of money laundering was ruled as not guilty.  Though it is like an entrapment to me as they are police that pretended to be interested on the bitcoins.  People are not aware of bitcoins.  Some were unaware of what it can do.  The buyer maybe was intrigued by the bitcoin and thought that he was being duped by this guy that there is such a thing and then filed a case.  Hope that maybe one day bitcoin will be famous enough to the entire world and can be considered as a real thing.

Definitely sounding like entrapment, but I don't know all the details of the story so there are a lot of things that aren't necessarily accurate to assume. If the cops forced him into it then I can see something like that being an issue, but it sounds like he did it on his own accord. Then again I don't know much about entrapment laws so take my opinion with a grain of salt.

A Florida judge ruling Bitcoin as not being money though, might be a good thing. I'll wait and see what comes of this, but this might make it harder to tax, or difficult to classify.

In my own opinion, this is a setback to the acceptability of Bitcoin by companies it firms in the world and also give credence to the insinuation that Bitcoin is used by criminals. It will also give government the reason to look into the direction of Bitcoin in order to clamp down on the freedom being enjoyed by the currency. This is not god news at all, it will afffect the relevance that Bitcoin is trying to get... MY opinion though[/list]

That's not at all what money laundering is. Money laundering is the obfuscation of the origins or ill-gotten gains. It's not hiding it from politicians, it's lying about where it came from to the IRS, and since money laundering is associated with a lot of violent crime, it is a serious crime.

It is a fair bit of entrapment because in order to make a charge of money laundering, the agents told him that they intended to use the bitcoin to commit a crime, and then when he sold it to them anyway, they charged that he was money laundering. They essentially entrapped him into a money laundering charge, which would not have arisen but for the intentional entrapment of the agents. Nothing the man was doing would have been money laundering outside of the government's actions, that's why it is entrapment.

Because the judge did not think or considered that bitcoin is money.  It is not yet familiar and some people only knows about bitcoins and other cryptocurrency.  On the lighter side of this incident I may say that those who were involved and heard this news would be more aware of what bitcoins are.  Maybe they will be curious and will become interested.

Judge dont know the use of it and maybe they dont know either bitcoin since they only knew that physical money is only existence of this world but if they really know the potential of cryptocurrency like bitcoin well they will surely hug the opportunity for this coin, they are just old school to know bitcoin since it is bit new to their knowledge and also on the other hand maybe they just knew bitcoin as fraud money.

Isn't florida inside USA? and there are many bitcoin exchanger registered and working in usa so definately they should have written bitcoin as currency in their law, quite puzzled why judge thinks bitcoin not a currency. ???

Being on an exchange doesn't make the thing being traded money. Bitcoin is traded for USD on a crypto exchange, just like stocks are traded for USD on a stock exchange. Just as that doesn't make a stock security money, it doesn't make bitcoin money. Stocks are an asset. Same holds true for bitcoin.