Federal Judge Rules Bitcoin Is Money In Case Tied To JPMorgan Hack (reuters.com) 87
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.
LOL (Score:2, Insightful)
When it serve their interest Bitcoins are money, when it goes against their interest Bitcoins are not money. How convenient!
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When it serve their interest Bitcoins are money, when it goes against their interest Bitcoins are not money. How convenient!
All I have to say is good fucking luck standing on the fence.
The long-established and clearly recognized practice of legal precedent will dissolve any dreams of wanting it both ways, as it has with countless legal cases.
Your own legal tools working against you? Tough shit for judges and lawyers. You either deal with it, or dissolve this fucked-up thing you created called the legal system that has fuck-all to do with justice anymore.
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The legal system never had anything to do with justice. It's a system of peaceful dispute resolution with the primary goal of avoiding a Hatfield v. McCoy feud.
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I don't see how the case where the judge ruled Bitcoin wasn't money was in the interest of the Federal Government. If you read the original article [miamiherald.com] about the MIami-Dade circuit case, it was about whether or not someone had promoted illegal activity and violated Florida's law against money laundering.
As TFS says, other cases around the US have also ruled that it counts as currency. It's not unusual for courts to disagree, eventually a case will reach the Supreme Court and their decision will set the preceden
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Ah, but if it's recognized as money, then it's subject to all the regulations about who can handle it and how, whereas pretty much anyone can sell/trade/etc Monopoly money however they like.
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Good point, but I wonder how difficult it would be to apply those regulations to something like Bitcoin. Since IANAL and I don't even know what those regulations are, I honestly have no idea, lol.
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Should be no more difficult than for "paper" money - pretty much all banking, etc. providers already deal primarily in digital ledger systems rather than physical markers anyway.
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It is illegal to have money aside of the USD in the US? What is this, Bizarro-Cuba?
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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.
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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.
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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?
It's been declared valuable, not illegal (Score:5, Interesting)
> 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*
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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.
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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).
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If the intent was to give congress this power exclusively, it seems remarkable careless of the normally proficient framers not to make this explict.
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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.
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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 parti
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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.
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"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.
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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. ;)
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"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?
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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.
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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... [npr.org]
Well Duhh... (Score:1)
roman_mir (Score:1)
No doubt roman_mir will be along soon to share his wisdom with us. Until then, here's a taster: bla bla gold yadda yadda taxes.
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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.
It's defined in the relevant laws Florida vs feder (Score:5, Informative)
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
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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.
Fiat Currency (Score:3)
See Wikipedia: https://en.wikipedia.org/wiki/... [wikipedia.org]
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"
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At some point you need to convert to real money.
Currently that is the case. In the future, that may not be the case. The problem with Cryptocurrency is that its base is in fiat currency of the realm it is being used in. At some point, BitCoin (and other cryptocurrency) will no longer be based on another Fiat currency, it will become its own Fiat Currency, outside the control of any one government. At that point, it becomes "real" money (for all values of real that are also Fiat)
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I'm not sure what the fiat part has to do with this. I doubt any country in the world still has commodity currency, ie money whose intrinsic value derives from the material its made of.
What I'd be curious about is whether it's somehow technically illegal to use foreign currency for transactions in the United States. I can pretty easily see a business in DC or NYC accepting Euros as payment if they have a lot of European customers.
There seems to be no restriction on pre-paid gift cards, which while not a p
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Make Currency Exchange the exception, perhaps? Just thinking off the top of my head.
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The situation I was thinking of was, say you own a store that sells European consumer specialties in Washington or NYC. Both places have a ton of Europeans living there -- diplomats and so forth, and they come in to buy stuff they can't live without.
Maybe to create a sense of "home" or merely as a convenience to visitors you're willing to accept Euros as payment.
What happens after that, who knows. Maybe you make periodic buying trips to Europe to stock up and you bring accumulated cash with you. Nice li
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Accepting foreign currencies is no problem. Paying out in foreign currencies or exchanging one for the other is where AFAIK things get sticky. I don't know how it is nowadays when most transactions are electronic... But stores along the Canadian border (here i
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Except, your implication is totally not true. There have been numerous other fiat currencies, e.g. in small towns. The US forbids a few things. You may not call it a "dollar" or some variant thereof. It cannot look too similar to US currency. A state may not introduce a fiat currency. A company may not make employees accept payment in company fiat currency.
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You could, if you were ignorant of tax law. In reality, this "loophole" has long since been closed - you can conduct your transactions in any currency or in barter if you want, but you're requir
It's both and neither (Score:2)
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.
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And once legal precedent is established, their own legal system and the tools they rely on will subvert their attempts to have it both ways in the future.
"But no reasonable prosecutor would bring such a case to trial". Isn't that how it goes when they want to ignore inconvenient laws?
People need more history education and perhaps legal training if they don't get this yet.
I concur. Might want to brush-up on some of the more-recent history.
Strat
What about ISK on EVE? (Score:3)
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?
**Anything** can be used as money (Score:2)
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. [google.com]
Taxing "legal tender" is fi
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"Anything can be used as money." => Nope, not really. The item must be in suitably common supply while still being somewhat scarce; it must be hard to forge; the recipient must be able to readily trust the authenticity and denomination of the item; it must be be fairly divisible; it must be durable/preservable, transportable, and convenient to exchange. And of course, it must be accepted by a critical mass of commercial participants.
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Those are all _desirable_ properties of money, i.e. sufficient, but not necessary conditions.
I thought the law was meant to be blind (Score:2)
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.
Barter items (Score:1)
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...