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Bitcoin The Almighty Buck The Courts Communications Crime United States News Technology

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.
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Federal Judge Rules Bitcoin Is Money In Case Tied To JPMorgan Hack

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  • LOL (Score:2, Insightful)

    by Anonymous Coward

    When it serve their interest Bitcoins are money, when it goes against their interest Bitcoins are not money. How convenient!

    • by Anonymous Coward

      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.

      • this fucked-up thing you created called the legal system that has fuck-all to do with justice anymore.

        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.

    • 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

      • 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.

        • 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.

          • 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.

    • by swalve ( 1980968 )
      Intent matters. I can burn currency for heat if I wanted. In that role, it isn't money.
  • 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.
  • 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.

  • by ytene ( 4376651 ) on Tuesday September 20, 2016 @02:48AM (#52922187)
    I think the issue that the Courts may be struggling with is whether or not Bitcoins are fiat currency in the United States.

    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" ... 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...
    • by swb ( 14022 )

      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

      • 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.

        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

    • That statement will make the Dollar the "fiat currency" of the United States. But it also implicitly means that any *other* currency is *not*...

      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.

    • ( 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. )

      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 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.

  • by Chewbacon ( 797801 ) on Tuesday September 20, 2016 @09:55AM (#52923709)

    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?

  • 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

    • "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.

  • 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.

  • 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...

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