Yet another U.S. judge has ruled that bitcoin isn’t money. U.S. Magistrate Judge Hugh B. Scott ruled in a money laundering case in Buffalo, N.Y. that bitcoin is more like a commodity and is not a form of currency, according to a local news report.…
Yet another U.S. judge has ruled that bitcoin isn’t money.
U.S. Magistrate Judge Hugh B. Scott ruled in a money laundering case in Buffalo, N.Y. that bitcoin is more like a commodity and is not a form of currency, according to a local news report. He recommended the money laundering charge be dropped against the defendant since bitcoin isn’t money.
Scott is not the first U.S. judge to rule that bitcoin is not money.
In another money laundering case last year, Miami-Dade Circuit Judge Teresa Mary Pooler stated it is very clear, even to someone with limited knowledge in the area, that bitcoin has a long way to go before it is the equivalent of money.
But in yet another case last year, U.S. District Judge Alison Nathan in Manhattan rejected the claim to dismiss charges related to a defendant’s alleged involvement in an unlicensed bitcoin exchange, Coin.mx. The defendant argued that bitcoin wasn’t money and therefore doesn’t fall under the purview of federal law of prohibiting any operation of an unlicensed money transmitting operation.
Nathan ruled bitcoins are funds within the plain meaning of that term. Bitcoins can be accepted as a payment for goods and services or bought directly from an exchange with a bank account. They, therefore, function as pecuniary resources and are used as a medium of exchange and a means of payment.
Even federal government agencies hold divergent views on this topic.
The Internal Revenue Service defines bitcoin as property rather than currency for tax purposes. The U.S. Treasury, by contrast, classifies bitcoin as a decentralized virtual currency.
The Buffalo case has been appealed and a district judge could take a different opinion.
Scott recognized the value of bitcoins but, in his view, that does not make them money. He defined currency as a medium of exchange or financial instrument that is assessed value, is regulated and protected by a government.
Bitcoins are not regulated and no government or central authority backs them. Scott noted that the purpose of bitcoin is to evade entanglement with sovereign governments.
He said money is not simply a financial medium of exchange or instrument people can devise.
He added that he could not rule out the possibility that bitcoin could become a widespread and an accepted form of exchange. But until that time, it stays a commodity like collectibles such as Beanie Babies, marbles or Pokemon trading cards.
The defendant, Richard Petix, a 31-year-old Rochester man, is accused of selling $13,000 in bitcoins to an undercover federal agent as part of a money laundering and drug distribution scheme.
Defense attorneys in the Buffalo money laundering case are withdrawing their motion to dismiss the charge, partly because U.S. District Judge Charles Siragusa has indicated he might reject Scott’s recommendation.
Siragusa noted the “far-reaching” consequences of Scott’s decision.
Petix’s lawyers are now planning to take his case to trial, due in part to Siragusa’s expected decision and since they wish to resolve the matter quickly.
Featured image from Shutterstock.
Last modified: January 26, 2020 12:10 AM UTC