A Bitcoin Question of the Day

Is Bitcoin money in the legal sense?

Photo credit: fdecomite, CC BY 2.0.

Just because people use Bitcoin as a currency doesn’t mean Bitcoin is the same thing as money. American Banker reports that a Florida court is about to make the first-ever ruling on whether Bitcoin is actually money, or just a possession people trade for goods and services.

Is Bitcoin Money? Florida Judge to Decide

In February 2014, Michel Espinoza was arrested in a Miami Beach motel for agreeing to sell $30,000 worth of bitcoin to an undercover police officer he had met on an exchange site called LocalBitcoins.com.

Prosecutors charged that Espinoza violated Florida statutes on money laundering and for operating an unlicensed money transmitting business.

But the defense has argued that these laws do not apply to Espinoza’s case, because he was not selling currency — he was selling bitcoin.

“It’s just like you selling your own personal property,” Rene Palomino Jr., Espinoza’s attorney, said in a court filing. “Since bitcoins are ‘goods,’ Espinoza’s alleged conduct is excluded from the definition of the term ‘money transmitter’ “ under both state and federal law.

American Banker notes that the IRS does not consider Bitcoin money—after all, it isn’t taxed—but the Treasury Department’s Financial Crimes Enforcement Network does.

[Update: SirWired noted that the IRS does tax the fair market value of Bitcoin if it is received as payment for goods/services. See here for more details.]

Florida judge Teresa Pooler is expected to rule on the case today, and I’ll update this post with her ruling.

But let’s also get your ruling: Is Bitcoin money? Or is it personal property that people exchange for items of value?


Florida Judge Rules: Bitcoin Is Not Money

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