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Federal Judge Rules Bitcoin Is Money In Case Tied To JPMorgan Hack (reuters.com)
Roughly two months ago, a Miami-Dade judge ruled that bitcoin does not actually qualify as money. Now, it appears that bitcoin does indeed qualify as money, according to U.S. District Judge Alison Nathan in Manhattan. "Bitcoins are funds within the plain meaning of that term," Nathan wrote. "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." Reuters provides some backstory in its report: Bitcoin qualifies as money, a federal judge ruled on Monday, in a decision linked to a criminal case over hacking attacks against JPMorgan Chase and Co and other companies. U.S. District Judge Alison Nathan in Manhattan rejected a bid by Anthony Murgio to dismiss two charges related to his alleged operation of Coin.mx, which prosecutors have called an unlicensed bitcoin exchange. Murgio had argued that bitcoin did not qualify as "funds" under the federal law prohibiting the operation of unlicensed money transmitting businesses. But the judge, like her colleague Jed Rakoff in an unrelated 2014 case, said the virtual currency met that definition. Authorities have said Coin.mx was owned by Gery Shalon, an Israeli man who, along with two others, was charged with running a sprawling computer hacking and fraud scheme targeting a dozen companies, including JPMorgan, and exposing personal data of more than 100 million people. That alleged scheme generated hundreds of millions of dollars of profit through pumping up stock prices, online casinos, money laundering and other illegal activity, prosecutors have said.
When it serve their interest Bitcoins are money, when it goes against their interest Bitcoins are not money. How convenient!
I would have thought this was pretty much obvious to anyone but a moron. Money serves a purpose, bitcoin serves that purpose, at least in part, so can be given the same label.
It is illegal to have money aside of the USD in the US? What is this, Bizarro-Cuba?
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
I think the issue that the Courts may be struggling with is whether or not Bitcoins are fiat currency in the United States.
... We'd need to look, but perhaps if Bitcoin is ruled a "fiat currency", then anyone offering financial services such as deposit or exchange would have to have a proper, Federal-Reserve-Issued "Banking Licence". Existing Banks might like that...
See Wikipedia: https://en.wikipedia.org/wiki/...
In other words, somewhere, in a piece of legislation enacted within U.S. Law, there will be something to the effect that "The United States Dollar, issued and enacted by the Federal Reserve Bank of the United States, is the acceptable currency of the nation". That statement will make the Dollar the "fiat currency" of the United States. But it also implicitly means that any *other* currency is *not*...
( We could envisage a scenario in which, absent such a decree/requirement, you and I could agree some complex scheme to defraud the Federal Government of tax revenue. I could sell you a car for "ten bananas" and when asked for taxes by the government, could give them a couple of pieces of fruit to cover the tax. )
However, it does sound as though the two rulings might be very subtly different. If one question was, "Does bitcoin perform a function equivalent to money?" then the answer would be "Yes". If the other question was, "Is Bitcoin a fiat currency within the United States?" then the answer would be "No". We'd need a lawyer to interpret the potential differences between the two rulings, however, because context will be everything...
Footnote: crypto-currencies create a huge headache for the big (multinational) banks, because they allow private individuals to exchange funds between currencies without paying currency exchange fees. Given that this is one of the most lucrative forms of income for banks [think about the amount of international trade that needs to be converted between currencies - and you will see that even a small "spread" will generate vast profits] and it is clear why they are so keen to see these definitions go "their way"
Boy, for someone with that tag line you seem conveniently ignorant of the U.S. Constitution. See Article I, Section 8, Clause 5. It isn't illegal to have foreign money, but it is illegal to create or coin money. And yes, our government is completely hypocritical about that when it ignores credit cards, debit cards and "gift cards".
I'm an American. I love this country and the freedoms that we used to have.
States often tax property, but since when does the IRS and the Feds tax property?
I'm an American. I love this country and the freedoms that we used to have.
government is certainly hypocritical, but credt/debit and gift cards are not an example of that. They are not coining money, they are a means of passing real money around and are in effect IOU's in US currency (or whatever currency you happen to have them issued), they are not an alternative currency..
They have become an alternative currency. If you want to test that, just try buying an airline ticket with for all debts public and private U.S. currency rather than a credit card and see how intimate the random body cavity search becomes.
I'm an American. I love this country and the freedoms that we used to have.
Actually written laws in the US normally include a "Definitions" section. Different laws in different states can and do use different definitions. In these case, neither actually used the term "money", so it's two completely different words being defined, of course the definitions are different.
The summary refers to a case in which a judge ruled that Bitcoin did not meet the requirements of one specific Florida law. The Florida law refers to "monetary instruments" and defines it as follows:
âoeMonetary instrumentsâ means coin or currency of the United States or of any other country, travelersâ(TM) checks, personal checks, bank checks, money orders, investment securities in bearer form or otherwise in such form that title thereto passes upon delivery, and negotiable instruments in bearer form or otherwise in such form that title thereto passes upon delivery.
Bitcoin is not "coin or currency of the United States or of any other country", it's not a money order, etc.
The federal law in the new case says:
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provides check cashing, currency exchange, or money transmitting or remittance services, or issues or redeems money orders, travelersâ(TM) checks, and other similar instruments or any other person who engages as a business in the transmission of funds
----
Note all of the ORs- only ONE need be true. If it's "money transmitting", it qualifies, OR if it's "other similar instruments". That's a difference between the federal law and the Florida law, the Florida law doesn't say "other similar instruments". Bitcoin may well be a "other similar instrument".
* The Florida law does mention "negotiable instruments", but those are elsewhere defined as documents ordering the payment of a *specific sum of money*. Bitcoins don't order the payment of a specific sum of money, unless perhaps you first define Bitcoin as money, but that's circular.
That's pretty much why I asked the "dumb" question.
I also don't coin or print money when having bitcoins. It may well have been created abroad (and with contemporary power prices, it most likely was), like all the other currencies I may have.
So the question stands, how is possessing this illegal? Has bitcoin been declared the first illegal virtual substance?
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Surely that clause just grants Congress the right to do mint coins. It doesn't seem to outlaw other entities from doing so.
> So the question stands, how is possessing this illegal?
It's not.
> Has bitcoin been declared the first illegal virtual substance?
No.
The ruling is that operating a business of providing money transfer services using Bitcoin to do it qualifies as one of these:
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provides check cashing, currency exchange, or money transmitting or remittance services, or issues or redeems money orders, travelers' checks, and *other similar instruments* or any other person who engages as a business in the *transmission of funds*
---
In other words, the ruling is that Bitcoin is one of the following three things:
A: "other similar instruments" (similar to money orders or travelers' checks)
B: A way to accomplish "transmission of funds"
C: Can be in the same category as the listed examples - it can be used for a money transfer service.
Running a money transfer business, in some situations, requires registration. The ruling is that the defendant ran a money transfer business, using Bitcoins to do it.
No, it doesn't "just" grant Congress the power. It grants Congress the exclusive power. Study your history. It was put in there to avoid the problem of States and even private banks issuing their own currency, which was a problem at the time.
I'm an American. I love this country and the freedoms that we used to have.
It's money when they want it to be, and it isn't when they don't.
“When I use a word,’ Humpty Dumpty said in rather a scornful tone, ‘it means just what I choose it to mean — neither more nor less.’
People need more DoubleThink training if they don't get this yet.
how the fuck is that a proof they have become an alternative currency. they are NOT an alternate currency, they are used exclusively against currency. whether you only accept debit or credit or cash is irrelevant as they are ALL in the same currency.
Can't see "exclusive" anywhere in the article, except in an unrelated aspect regarding copyrights and patents, and in legislation over DC itself.
If the intent was to give congress this power exclusively, it seems remarkable careless of the normally proficient framers not to make this explict.
especially when security at an airport likely has no fucking idea I paid cash at a travel agency
They might well know. Travel agencies are expected to report all manner of things. Try booking a flight on the same day (or, worse, rescheduling a flight), for example. Unless it's something that you do regularly and you did it through a business account, you'll almost certainly be marked for extra security checks.
I am TheRaven on Soylent News
No, it was not put there to avoid that problem. For the first 100 years of the US most of the money issued was private. Bank notes issued by private banks. It was not until the Civil War that the Federal Government got into the money business issuing Greenbacks.
The clause in the Constitution grants the government to right to mint money. It does not precluded anybody else from doing so.
The tax rules around currency trading are complex. Each time you convert your currency you have to calculate your gain / loss from FX rate movements and pay taxes on that. If you are a currency traded you must "mark to market" you currency positions at the end of each year and pay short term capital gains on your unrealized gains. One of the measures of being a currency trader are the number of transaction you do each year, so I could see a casual Bitcoin user falling into this category.
Money is by it's very nature little more than a sophisticated IOU system for real wealth (food, property, etc). The paper itself is practically worthless outside that context.
--- Most topics have many sides worth arguing, allow me to take one opposite you.
"The clause in the Constitution grants the government to right to mint money. It does not precluded anybody else from doing so."
The Constitution clearly states any powers/rights not delegated to the government are thus the powers/rights of the people and/or states. Since the government has the power to mint money granted to it, the people by constitutional decree do not have that right.
Still waiting on Serviscope_minor to wake up to fucking reality and realize that Jessica Price isn't going to fuck him.
With PLEX an exchange rate to real-world currency has been established. So will this pave the way for game criminals to face real world criminal charges?
Chewbacon
The Bible is like Wikipedia: written by a bunch of people and verifiable by questionable sources.
FYI, That clause is limited to "State" (government). Not private entities or businesses. There are plenty of examples of Amusement Parks and Kiddie Pizza Places that offer coins of the realm currency.
Try again.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
That is not what that clause says. Federal Government doesn't have exclusive right to coin money. If it did, then the Federal Reserve would be illegal.
Unless that is the point you're trying to make, try again. ;)
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
The Constitution clearly states any powers/rights not delegated to the government are thus the powers/rights of the people and/or states. Since the government has the power to mint money granted to it, the people by constitutional decree do not have that right.
What can I say? For over 100 years almost every US bank issued their own bank notes. Even railroads issued their own money. This practice never made it way to the Supreme Court as a issue. Here is a interesting link.
http://www.npr.org/sections/mo...
Arguing if Bitcoin is money or money is _completely_ pointless:
Anything can be used as money.
Are governments going to start taxing virtual credits? /sarcasm "Here is your 1,000 gold coins in WoW. Too bad you don't have a way to collect them! Ha-Ha!"
Where does this insanity end??
Before money was invented people bartered with _their_ property.
Bitcoin is property. PERIOD.
The government has no jurisdiction on taxing private property. Before you disagree with me look up Allodial Title.
Taxing "legal tender" is fine because you don't own the money. Trying making your own legal tender and see how fast THAT lasts. All you can do is use it.
The fact that Bitcoin can be used "as" money is beside the point -- anything _could_ be. Private currencies are NOT money in the legal sense. They are being used in lieu of since citizens don't have the right to issue legal tender. We DO have the right to issue private currency.
Governments do NOT create or "mint" bitcoin -- they are NOT the owners. So frak off trying to claim ownership over something you didn't create.
--
Down-vote is NOT "I disagree" but that this "post is off-topic"
It's also limited to preventing States from designating their choice of currency (other than gold and/or silver) as legal tender. They can issue whatever currency they want, so long as it isn't close enough to U.S. federal currency to be considered counterfeit. They just can't make anyone accept it the way people are forced to accept an offer of full payment in legal tender to settle a debt—regardless of what currency or goods the debt may originally have been denominated in.
This is to prevent a particular state from picking some good it has in abundance (but which is in low demand), declaring it legal tender, and using it to "settle" debts at below-market rates. Somewhat ironically, this is exactly what the federal government did when it went off the gold standard and declared unbacked paper currency to be legal tender in payment of debts.
"The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat
How come they are free to decide if Bitcoin is money or not on a case by case basis? It seems clear that they are doing so based on the effect of its status on the associated prosecution, which is hardly an unbiassed move.
"That is not what that clause says."
The tenth amendment reads pretty much as I said it, verbatim. Have you bothered reading it and thinking about it in this context?
Still waiting on Serviscope_minor to wake up to fucking reality and realize that Jessica Price isn't going to fuck him.
This court found that transferring BTC should be regulated the same as transferring Euros, or any other currency. Which is legal (but regulated).
An earlier court found that transferring BTC should be regulated the same as transferring gold, or any other valuable commodity. Which is legal (but has some reporting requirements).
Socialism: a lie told by totalitarians and believed by fools.
The Federal Reserve does not coin money. That's the Dept of the Treasury (specifically, the Bureau of Engraving and Printing, and the Mint). There's not much connecting the two - the notes are technically backed by the assets of the Fed, but the Fed sold off most of those assets in the past 15 years, so that's a very abstract connection.
The money supply has very little to do with the amount of physical currency in circulation - something the gold nuts and BTC nuts don't seem to understand.
Socialism: a lie told by totalitarians and believed by fools.
Does it really matter if it is or not? A barter item can still be used in lieu of currency.
IE if I asked for a crate a fine wine or whisky to stop hacking/DDOS'ing somebody, I'm still getting paid. Similarly if somebody was going to pay a hitman in rare art to kill their spouse...