Bitcoin is Money and (pirateat40 is) Subject to Law (Globe & Mail)

[darkmule]

This story discusses the pirateat40/Trendon Shavers scam and the SEC's lawsuit against him, which is surprisingly little discussed here considering its importance.

The Bitcoin is a phenomenon of far-reaching economic libertarianism, which its proponents claim to be a currency, a purely digital one that is not backed or issued by any national government. Last week, it obtained significant recognition as a currency, though not in the most favourable context.

Apparently for the first time, a court has concluded, persuasively, that the Bitcoin is indeed money – but in a prosecution for fraud.

In 2011, Trendon T. Shavers of McKinney, Tex., who has used the Internet moniker pirateat40, started a company called First Pirate Savings and Trust, later changed to the less provocative name Bitcoin Savings and Trust. He promised an extraordinarily high interest rate – up to 1 per cent per day – and attracted 66 investors from across the United States. Their holdings were in Bitcoin units.

A year ago, BTCST defaulted. The Securities and Exchange Commission commenced a civil lawsuit alleging fraud – more particularly, that Mr. Shavers had set up a Ponzi scheme, paying the investors their interest from the proceeds of new investments in the company.

In a preliminary motion, Mr. Shavers argued that he could not have committed securities fraud. There was no “investment of money” to fit him into the terms of the Securities Act, he said, because Bitcoin units are not money.

More at the link.

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[Phinnaeus Gage]

Let me get this straight: The guy who conned millions from bitcoiners is credited for proving that Bitcoin is money.

[Viceroy]

lol, yep.  It hardly a surprise that a ponzi scheme would develop in the bitcoin community.  Ironically we need regulation for bitcoin to thrive.

[/dev/null]

Bitcoin is Money and Josh(BFL) is gay.

Now you can ask for refund and file a legal complaint on ic3.gov or any local police department.

[darkmule]

Let me get this straight: The guy who conned millions from bitcoiners is created for proving that Bitcoin is money.

Sometimes, irony can be really. . .ironic.

[Phinnaeus Gage]

credited.  lol, yep.  It hardly a surprise that a ponzi scheme would develop in the bitcoin community.  Ironically we need regulation for bitcoin to thrive.

I just caught the misspelling and corrected it prior to seeing your post. Thanks, bud.

[aigeezer]

The argument that regulation is necessary to prevent Ponzis is specious. If it were true, then Ponzis would not occur using already-regulated currencies. However, most of the world's Ponzis use regulated currencies - Pirate's story is "newsworthy" mainly because it is the first documented one to use BTC.

What follows from this?

All arguments that BTC regulation is necessary to cure any problem that is rampant among already-regulated currencies - are false and should be treated with derision.

[Viceroy]

Regulations do not prevent people from acting.  They provide a framework by which we can define what is acceptable and what is not.  The same framework allows us to punish those who 'break the rules'.

What you said is true.  But without law Bernie Madoff's victims would recover nothing, at least they got some of their money back.

[Elions]

While i'm happy that a court found that Bitcoin IS money, it's only a legal precedent at the moment, it could be changed back at any moment unless it goes to higher courts.

[monkeybars]

While i'm happy that a court found that Bitcoin IS money, it's only a legal precedent at the moment, it could be changed back at any moment unless it goes to higher courts.

I don't think there's any likelihood of that. Unlike economist wankers and clueless polits (read: Ron Paul), judges are concerned with the letter of the law; in that context, it's inconceivable Bitcoin would be anything but money.

[Viceroy]

You prefer Madoff's victims recover nothing, then.

[420]

Let me get this straight: The guy who conned millions from bitcoiners is credited for proving that Bitcoin is money.

hey the theft wasn't for naught!

[Elions]

While i'm happy that a court found that Bitcoin IS money, it's only a legal precedent at the moment, it could be changed back at any moment unless it goes to higher courts.

I don't think there's any likelihood of that. Unlike economist wankers and clueless polits (read: Ron Paul), judges are concerned with the letter of the law; in that context, it's inconceivable Bitcoin would be anything but money.

This operates on the idea that all judges act solely on law and that they all have a flawless look at law... Which sadly is not the case.

[darkmule]

I don't think there's any likelihood of that. Unlike economist wankers and clueless polits (read: Ron Paul), judges are concerned with the letter of the law; in that context, it's inconceivable Bitcoin would be anything but money.

I think BTC is actually a hybrid.  It is certainly money for the purposes of prosecuting a Ponzi scheme where the "accounts" are denominated in BTC.  It might not be for other purposes.  For instance, some regulatory agencies that for whatever reason don't want to mess with it might decide it isn't "money" for the purposes of being within their jurisdiction.

While regulators often like to claim that their statutory authority entitles them to regulate everything under the sun, there are occasions when something is such a headache they'd just as soon ignore it.  While two big states (New York and California) have already weighed in to some extent on BTC, it's entirely possible some smaller states with less BTC activity would rather not.