28 Jul Judge: Bitcoin is Not Money… For Now

You can’t be guilty of money laundering if no money is involved. That’s what Miami Judge Teresa Mary Pooler ruled earlier this week. Poor Michell Espinoza, a seller of cryptocurrency Bitcoin, was the subject of a sting by the Secret Service and Miami Beach Police. The cops told Espinoza they wanted to buy Bitcoin to purchase stolen credit cards, and he sold them some. They ultimately arrested him for, among other things, money laundering. This was in part because Espinoza was apparently smart enough not to accept bills the cops told him were counterfeit. Said the judge, Bitcoin is not “backed by anything” and it “cannot be hidden under a mattress like cash and gold bars.” But she didn’t say Bitcoin will never be money, adding, “Bitcoin has a long way to go before it is the equivalent of money.”

In 2015, however, the Commodity Futures Trading Commission ruled Bitcoin a commodity subject to the Commodity Exchange Act. In May, the CFTC granted registration to a Bitcoin swaps trading platform. To many this added regulation also adds legitimacy to the digital currency.

I’m no expert on this stuff, but I’ve consistently wondered how this currency works where (a) no one admits to having started it, (b) it runs itself with no one claiming to be in charge, (c) it decides based on some algorithm when and how to issue more Bitcoin, and (d) several Bitcoin operators have been hacked to the tune of hundreds of millions of dollars. However, the concept of a global currency that is free of exchange rate issues has its attractions for sure. And apparently it’s ok to launder Bitcoin for now.