Yeah finally another intelligent article.
Regulators can’t have it both ways. Bitcoin is either a currency or it isn’t. If it is, then the SEC can prosecute Shavers as operating a Ponzi scheme, but then trade in that currency is (by precedent) now legal, unless you want to write laws to specifically exclude Bitcoin from trade (or issue sanctions such as those imposed on Iranian Rial). If you outlaw Bitcoin explicitly by name, however, then if the name is changed or someone starts up Bitcoin v2 you have to outlaw the next virtual currency explicitly. Given the time it takes to change laws around this, that cycle could never be ‘won’. So then why not outlaw all virtual currencies?
The problem with that is if you want to outlaw all virtual currencies you have to make the laws broad enough to encompass any new configuration of a virtual currency that might arise. If you make it broad enough to accomplish that goal then you could very well end up inadvertently outlawing all non-local currencies, because at a broad level Bitcoin is indistinguishable from a real-world currency (as Judge Mazzant rightly pointed out). However, you would also make illegal more ‘legitimate’ virtual currencies such as Mint Chip, which is being incubated by the Canadian Mint currently. You’d probably end up making airline miles, zynga coins, and other such variations on the currency theme also illegal. The upshot is that Bitcoin and all other virtual currencies or pseudo currencies cannot be made broadly illegal simply by virtue of the fact they are virtual, and current laws that define currency as a physical commodity or a financial instrument as written are hopelessly out of date and are essentially aiding the proliferation of Bitcoin.
But this approach would be way too logical and rational. There has to be a more complicated way.
