Florida Judge Overturns Bitcoin Vendor’s Conviction
A Florida appeals judge ruled in favor of a man accused of using digital cryptocurrencies to conceal illegal activity, saying state monetary regulations did not define Bitcoin as money.
A Florida appeals judge ruled in favor a man accused of using digital cryptocurrencies, such as bitcoins, to conceal illegal activity, as state monetary regulations did not define Bitcoin as money.
In 2013, Miami, Florida government law enforcement agents charged Michell Espinoza, an area resident selling bitcoins, with unlicensed money transmission and money laundering. Espinoza sold Bitcoins to a local government police officer pretending to be interested in purchasing Bitcoins for use.
In late July, Eleventh Judicial Circuit of Florida judge Teresa Mary Pooler dismissed the charges against Espinoza, writing “there exists no evidence” of transactions involving illegal goods or services, adding “bitcoin may have some attributes in common with what we commonly refer to as money, but differ in many important aspects.”
‘Limited’ Impact on Law
William Luther, an assistant professor of economics at Kenyon College, says how governments treat cryptocurrency may vary from state to state.
“The implications of the Florida decision are almost certainly limited,” Luther said. “For one, courts in other states like Texas have ruled that bitcoin is money. Moreover, federal agencies like Financial Crimes Enforcement Network (FinCEN) have advised that bitcoin should be considered money and that bitcoin exchanges must register as money services businesses.”
Luther says bitcoins are still growing and evolving as a currency, hindering their widespread adoption by consumers.
“It is unlikely that bitcoins will become the ‘new Swiss bank account’ anytime soon,” Luther said. “Although bitcoin volatility has fallen significantly over the last two years, it remains more volatile than most major currencies and—perhaps for this reason—most routine users are reluctant to hold much of their wealth in bitcoin.”
Luther says cryptocurrencies already have some appeal to consumers.
“Bitcoin will allow some users, like those concerned with chargeback fraud or making international remittances, to transact a little more cheaply than they are able to with existing alternatives,” Luther said.
Norbert Michel, a financial regulations research fellow at The Heritage Foundation, says Espinoza’s case will mostly affect Florida consumers.
“This ruling has a clearer impact on how these laws will be enforced in Florida, but that doesn’t mean the federal government will go along with anything in this case, and I’d be surprised if FinCEN even cares.”
Michel says cryptocurrency is an example of a “core economic freedom.”
“They represent a core economic freedom in that people should be allowed to transact in whatever medium they choose,” Michel said. “There is room for multiple mediums of exchange to exist, and as a matter of policy we should reduce and eliminate any regulatory barriers to allowing them to exist.”