Bitcoin Isn’t Money, Florida Judge Rules in Laundering Case

Journalist:
Samburaj Das @sambdas
July 25, 2016

A landmark criminal case believed to be the first involving a money-laundering charge involving bitcoin has seen its verdict. The criminal charges thrown out, with bitcoin not deemed to qualify as money, according to the ruling judge.

Defendant Michell Espinoza was arrested in 201andmd charged with “illegally selling and laundering” $1,500 in bitcoin to an undercover law enforcement officer. Prosecutors alleged that Espinoza had violated Florida’s anti-money laundering law by operating as an unlicensed money transmitting business.

However, Miami-Dade Circuit Judge Teresa Mary Pooler has thrown the charge out of court, stating that the cryptocurrency was not “tangible wealth” and that it wasn’t considered money since the cryptocurrency wasn’t backed by any bank or a government, revealed a report by the Miami Herald.

Pooler has previously remarked that the case and the subject as bitcoin as money as “the most fascinating thing I’ve heard in this courtroom in a long time.”

In an eight-page order that announced her verdict, Pooler wrote:

The court is not an expert in economics, however, it is very clear, even to someone with limited knowledge in the area, the Bitcoin has a long way to go before it is the equivalent of money.

Furthermore, the report also had Pooler insisting that the charge of money laundering, in this case with Bitcoin, was simply way too vague. Even more-so, when the charge applies to an individual engaging in a financial transaction that promotes illegal activity.

Notably, she bluntly added that the law wasn’t about to punish Espinoza for simply selling his property to another.

This court is unwilling to punish a man for selling his property to another, when his actions fall under a statue that is so vaguely written that even legal professionals have difficulty finding a singular meaning.

During the course of the case, a hearing in May saw Barry University economics professor Charles Evans – acting as a defense witness – state that bitcoin wasn’t money.  He deemed the cryptocurrency as “poker chips that people are willing to buy from you.” Ironically, the economics academic was paid in bitcoin to the equivalent of $3,000 for his appearance.

Espinoza was arrested along with Pascal Reid, who has since plead guilty to acting as an unlicensed money broker. He was sentenced to probation and an intriguing deal, in exchange for the guilty plea. Reid has agreed to teach law enforcement about bitcoin.

The prosecutors are expected to go to trial, following the defeat.

Featured image from Shutterstock.

Last modified (UTC): July 25, 2016 17:57

Samburaj Das @sambdas

Samburaj is the Editor for CCN, among the earliest and foremost publications covering financial and blockchain news. He has authored over 2,000 articles for CCN. Email him samburaj(@)ccn.com or find him barely tweeting @sambdas