Miami Money-Laundering Case May Define Whether Bitcoin Is Really Money (ibtimes.com)

David Gilbert, reporting for IBTimes: Michell Espinoza, a 32-year-old computer programmer, was arrested for attempted money-laundering in 2014 when he sold $1,500 worth of bitcoin to undercover FBI agents who said they were going to use them to buy stolen credit cards. Now in a Florida courtroom, Espinoza and his lawyers are trying to get the charges dismissed on the grounds that bitcoin, under Florida law, should not be defined as actual money. (Editor's note: the source has annoying auto-playing videos. Alternatively you can use the link below.) This is thought to be the first case of its kind and the ruling by Miami-Dade Circuit Judge Teresa Mary Pooler will be watched with great interest not only in the U.S., but around the world. "This is the most fascinating thing I've heard in this courtroom in a long time," Pooler said on Friday. A ruling is not expected for several weeks yet.The report also cites the take of Charles Evans, Associate Professor of Finance and Economics at Barry University, who provided evidence on behalf of the defense and told the court that bitcoin, in his opinion, is not money. He said, "Basically, it's poker chips that people are willing to buy from you." Miami Herald has more details.

Comments

All money is poker chips

[ArmoredDragon]

At the end of the day, any fiat currency is only worth whatever you think it's worth. So you can really identify any money as poker chips.

Re:All money is poker chips

[Kjella]

At the end of the day, any fiat currency is only worth whatever you think it's worth.

I wish. Unfortunately my money is only worth what other people think it's worth.

Re: All money is poker chips

[ArmoredDragon]

The difference in this case is that the dollar is declared legal tender in the US, backed by law. In this country, offer something in exchange for a stated price, you must accept payment in dollars or face court action. Bitcoin has no such legal standing. It's not officially money ( yet ).

So then how is a bitcoin different from a euro in this regard?

Re: All money is poker chips

[lgw]

Only in maturity. There are no Bitcoin savings accounts yet, no currency-style regulation of it, and the Bitcoin money supply is equal to the amount of Bitcoin issued.

Legally, Bitcoin is currently treated that way gold or stamps are: a collectable with a objectively measurable value (even if one that changes fairly often). Today that makes sense. But if banks stared offering Bitcoin-denominated savings accounts, that would be exactly the same as a non-EU bank offering Euro-denominated savings accounts, called euroeuros, for historical reasons. That could happen with either Bitcoins or gold, and in both cases the money supply would become much larger than the "physical" supply.

Re: All money is poker chips

[WarJolt]

Your landlord could easily exchange gold for rent. At some point your landlord needs to pay taxes. It's really more about taxes. We all pay them. We all benefit in some way from taxes. The government uses dollars to cover it's debts. Think of a dollar like an IOU. The government collects these IOUs in taxes everytime you have economic activity and in turn the government provides an environment for you to carry out economic activity. They have to issue IOUs to provide services that create an fair environment to conduct business. For example judges, police and prison keep you from robbing a bank. Fiat currencies value is derived from the amount of trust everyone has in the system. It's a bit more complicated than how I "feel" about a currency since trust is a little bit more objective than feelings are despite feelings playing a huge roll in the value of a currency. If you do the numbers you can figure out if a currency is undervalued or overvalued.

"Basically, it's poker chips that people are willi

[__aaclcg7560]

"Basically, it's poker chips that people are willing to buy from you."

Daddy Trump bought $3M in poker chips to bail out The Donald when a bond payment was due.

In December 1990, a lawyer for Fred Trump walked into Trump Castle in Atlantic City and, according to reports at the time, deposited a check with the casino for $3.36 million in exchange for chips. Instead of using the chips to play in the casino, the lawyer left.

The result: an interest-free loan to Trump from "Daddy-O."

The same day that Fred Trump made his chip purchase, The Donald stunned the gaming world and his creditors by making a scheduled bond payment.

https://www.buzzfeed.com/andrewkaczynski/you-can-rely-on-the-old-mans-money

Tough sell by the prosecutors

[DatbeDank]

The IRS already defines Bitcoin as "property" and not currency.They seem to have tied an arm behind themselves. From this nifty press release: https://www.irs.gov/uac/newsro...

I give it another year or so before gold, silver, and "bitcoin" have a special designation that closes this loophole.

Charged with believing a story

[swm]

I have a real problem with this case.

Suppose it was an undercover drug deal. The cops sell him X grams of cocaine in exchange for $1500 in bitcoins. Then they charge him with buying drugs. When it comes to trial, he pleads that he didn't know they were cops; he never would have bought the drugs if he knew they were cops. Does this matter? Not at all. Buying drugs is illegal. It doesn't matter who he bought them from, or whether he knew they were cops.

Now suppose his attorney say OK, let's see the drugs. And the cops dutifully produce a bag of white powder, and they send it out to be tested, and the test shows that it is 100% primo Dominos 10X confectioner's sugar. And his lawyer says, "Hey! He's charged with buying drugs; where are the drugs?" And the cops say, "Oh, you know, it's such a hassle checking out drugs from the evidence locker; all this paper work; all these forms; god help you if it comes back a gram light... We just went down to store and bought some powdered sugar. But it doesn't matter: we told him it was drugs; he obviously thought it was drugs or he wouldn't have paid $1500 for it." Does this matter? Absolutely. It doesn't matter what he thought: he did not do the illegal thing that he is charged with: he did not buy drugs. He walks.

Now look at this case. The cops paid him $1500 cash for bitcoins. They told him they were going to buy stolen credit cards with the bitcoins. Now maybe, if they had actually bought stolen credit cards with the bitcoins, they could have charged him with being some kind of accessory to that crime. But they didn't. There was no crime. There were never any credit cards. There wasn't even a bag of white powder. All they've got is a story. A story that he believed. Or not. Maybe he didn't know whether it was true. Maybe he didn't care. Sure, sure, you guys want to be leet haxorz buying credit cards? You got $1500 cash you can be James Bond, you can be Tony Stark, whatever.

I do not understand how this guy gets charged in connection with a crime that did not occur.

Re:may not be money but that's irrelevant

[bsolar]

I read a more detailed article on the matter and the prosecutor's line of defence is definitely more about the first charge, which is "dealing in currency without a money transmitter license" and pretty clearly requires bitcoins to be considered "currency" to stand, which is a legal grey and definitely not "of course" so. The money laundering accusation is weak no matter the legal status of bitcoins but likely there to put pressure on the defence to plead guilty on charge that matters, just as the other guy involved did (and got the money laundry charge promptly dropped).

Re:Trading goods for illegal services is OK?

[Cederic]

It's an interesting and tricky one. Ignoring whether anti money laundering laws are a good thing*, surely converting money into a non-currency form prior to exchanging it for an illegal good or service is substantively no different to exchanging the cash itself.

It seems odd that the determination of whether Bitcoin is money is even relevant.

*No, not in their current form. Why the fuck is it 'money laundering' to use cash to buy an illegal good or service? Surely that's "buying an illegal good or service". Stop adding laws that make one crime multiple crimes, it doesn't serve justice.