BTC declared 'unambiguously' money legally by US Federal District Courts

02 Feb, 2019 | Updated: 03 Feb, 2019
by Arthur Sillers
Regulation
BTC declared 'unambiguously' money legally by US Federal District Courts

According to Stephen D Palley, a lawyer based in D.C., the Federal Court of Michigan ruled yesterday that Bitcoin is legally ‘money.’ This compounds with a growing consensus that cryptocurrency indeed is ‘money’ as opposed to a security, commodity, or other non-currency financial asset.

The decision was handed down by the  US District Court for the Eastern District of Michigan in a case involving a money laundering scheme involving ‘hundreds of thousands of dollars’ worth of Bitcoin traded on LocalBitcoin. During trial, the defendant’s legal defense argued that Bitcoin does not qualify as ‘money,’ and therefore statutes which apply to money servicing did not apply.

The court decided, on the contrary, that, in accordance with similar decisions made by other Federal District Courts, money laundering involving Bitcoin does count as a violation because Bitcoin ‘clearly qualifies’ as ‘funds’ or ‘money’ because it is something ‘generally considered a medium of exchange, a measure of value, or a means of payment.’

This appears to establish (and cosign) precedent that Bitcoin counts as money in the case of violations of this type, though it is not clear to what extent this can be generalized to other legal considerations involving Bitcoin or other cryptocurrencies.

 The District Court of Michigan utilized FinCEN’s interpretive guide in consideration of their ruling, and positively noted that there is nothing ambiguous- Bitcoin is legally a type of money. FinCEN, short for Financial Crimes Enforcement Network is the wing of the United States Treasury tasked with enforcing various financial crimes domestically and internationally.

Stephen D Palley notes that while crypto has and has had consistent run-ins with the SEC throughout the last year, 2019 may see the involvement of FinCEN and the Office of Foreign Assets Control (OFAC), the branch of the Treasury which enforces and oversees trade sanctions. OFAC is quietly one of the more powerful US institutions, capable of applying penalties, tariffs, and sanctions against entities both domestic and foreign, and may become more involved in crypto as crypto itself becomes involved in international trade.

Read more: Wyoming introduces new bill giving legal clarity to cryptocurrency, New Hampshire bill would legalize BTC for tax payments

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