A Florida court declared bitcoin is a fake currency in a case against a man charged with illegally selling and laundering $1,500 worth of bitcoin. The Miami-Dade judge Teresa Mary Pooler cleared the charges against Michell Espinoza, who was illegally selling bitcoins to undercover detectives.
The issue arises because detectives working the case told Espinoza that they planned to use the bitcoin that they were buying from him to purchase stolen credit cards. According to Florida’s definition of the law, this is considered money laundering. At least, that is the way that the law is written. In this state, one can be charged with the crime if they knowingly participate in a financial transaction that will “promote” illegal activity.
The problem is that Judge Pooler doesn’t think bitcoin counts as a “financial transaction.”
Judge Pooler, however, ruled that the current statute was too vague to apply to cryptocurrency and that even legal experts “have difficulty finding a singular meaning.”
“The court is not an expert in economics, however, it is very clear, even to someone with limited knowledge in the area, the Bitcoin has a long way to go before it the equivalent of money,” the judge says.
This could set a precedent that allows criminals to create an underground bitcoin asset that can be bought, sold, and traded like cash, since the state law only applies to “tangible wealth.”
Moreover, this ruling is a problem because bitcoin has a bit of an issue with its image. Recently, bitcoin has been trying to present itself as a legitimate contender—one that is used by honest individuals and business establishments; however, this latest news undermines those efforts. Notably, after the shutdown of Silk Road (which had funds seized by the FBI), bitcoin became rather linked with ideas related to criminal activity, and such rulings only further open the currency to similar disparagement.