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Florida Bitcoin Trader Faces Felony Charges for Selling Crypto to Undercover Police

Last Updated March 4, 2021 2:53 PM
W. E. Messamore
Last Updated March 4, 2021 2:53 PM

It’s a case of police entrapment that goes beyond the pale. After a ruling Wednesday by the U.S. Third District Court of appeals, a Florida man will have to face a trial by jury over felony charges in Miami for selling bitcoin to undercover police.

Felony Charges for a Victimless Crime?

“Espinoza’s bitcoins-for-cash business requires him to register as a payment instrument seller and money transmitter” under Florida financial statutes, the court ruled Wednesday, adding that he was “not merely selling his own personal bitcoins, he was marketing a business.” Now he’ll face serious felony charges for money laundering as well as operating an unlicensed “money services” company.

It’s a textbook case of a victimless crime, an act that may run afoul of the Florida statutes, but one to which all parties consented, and as a result of which no party was injured. The state of Florida has already ruined this man’s life just for selling cryptocurrency tokens to people who wanted to buy them– for engaging in peaceful acts of commerce.

The fact that undercover police and the justice system can get their claws so deep into man for something like this is disconcerting to the utmost.

The Entrapment of Michell Espinoza


Miami Beach police found Espinoza on LocalBitcoins.com  where he was using the screenname MichellHack and asked to meet in person.

Here was a man who was not looking to cause any trouble, who was causing no harm to anyone, who was merely meeting with other local residents in person to help them buy bitcoin, and the police force in Miami decided to ruin his life.

As if they didn’t have anything better to do:

Public records requests have found a backlog of over 3,500 untested rape kits in Miami by the police department’s own count:

Espinoza met them three times at a coffee shop, an ice cream place, and a hotel, and sold the undercover officers $1,500 USD worth of bitcoin. The police say they told him they were going to use the money to buy credit card numbers stolen by Russian hackers, which formed the basis for the money laundering charges.

Espinoza’s Charges Were Dismissed By A Judge in 2016

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In 2016 Miami-Dade Circuit Judge Teresa May Pooler dismissed the charges against Michell Espinoza, ruling:

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

Indeed, since then the Florida “money services” statute was rewritten by the Florida legislature to include “virtual currency” as a form of money, a point that will no doubt weaken the prosecutor’s case against Espinoza in the upcoming trial.

For Judge Pooler, the police entrapment tactics to get a money laundering charge were not too impressive, and the case hinged on whether or not bitcoin qualified as money under Florida law. The ruling drew global attention from the cryptocurrency community, which generally considers bitcoin to be a form of currency, but was relieved for Espinoza’s sake that the charges were dropped.

Barry University economics professor Charles Evans was brought in as an expert legal witness, and told the court bitcoin is not money, but something more like comic books, baseball cards, or poker chips that people are willing to buy.

Appellate Court Rules Espinoza Must Face Trial

The opinion of Judge Teresa Pooler was overturned by a higher court Wednesday, ruling that Pooler was incorrect to dismiss the felony charges against Espinoza without a trial, that he was indeed operating a money services business without a license, and that the charges will be reinstated.

A trial date has not been set yet.

Disclaimer: The views expressed in the article are solely those of the author and do not represent those of, nor should they be attributed to, CCN.com.

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