People who use Bitcoin to fund illicit behavior cannot be charged with a crime, according to a Miami judge who ruled the cryptocurrency is not actually money in a contentious court battle on Monday.
While the decision by Miami-Dade Circuit Judge Teresa Mary Pooler has been praised by Bitcoin advocates who believe the ruling will increase the use of the cryptocurrency, the case is a net loss for users in the long run. Bitcoin and other cryptocurrencies are becoming popular because they are not beholden to governments and their economic errors. However, the Miami ruling strengthens the perception cryptocurrency is linked to criminal behavior. Defendant Michell Espinoza was charged for transmitting $1,500 worth of Bitcoins to undercover detectives who told him they were going to use the funds to purchase stolen credit cards. At that point, the currency used should not matter. By ruling Bitcoin is not a legal tender in the case, Judge Pooler effectively legalized money laundering in the state of Florida.
Bitcoin Case Reveals Limited Understanding Of Cryptocurrency
By transmitting $1,500 worth of Bitcoins to undercover detectives who said they wanted to buy stolen credit cards, Michell Espinoza's attorney said his client was simply selling his property to a consenting party.
Miami Judge Teresa Pooler agreed with the defense, saying Bitcoin cannot be laundered because it "cannot be hidden under a mattress like cash and gold bars."
"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," Pooler wrote in an eight-page statement on the ruling.
The judge also took aim at the state of Florida's money laundering laws, which she said were simply too vague to single out a punishment.
"This court is unwilling to punish a man for selling his property to another, when his actions fall under a statute that is so vaguely written that even legal professionals have difficulty finding a singular meaning," she added.
While Bitcoin has been strongly supported by the tech community in the United States and around the world, it is typically associated with illicit activity. The coins were used to traffic drugs in the now-defunct Silk Road drug network.
Financial experts have struggled to define cryptocurrencies since their inception. Because Bitcoin and similar currencies are not sanctioned by any government or financial organization, they are considered inflation-proof. Users obtain cryptocurrencies by solving math problems on their computers in a process called "mining". The problems become increasingly difficult as more users participate.
CryptoCoinsNews says electrical limits constrain the currency
One reason the exact amount of electricity used to power bitcoin is uncertain is that the miners that produce bitcoin maintain a low profile...Electricity can comprise 90% to 95% of mining costs, Kelly-Detwiler noted. He compared energy and computers to fuel and bulldozers that claw away at hillsides for gold.
Miami Herald provides a local perspective
In a case closely watched in financial and tech circles, the judge threw out the felony charges against website designer Michell Espinoza, who had been charged with illegally transmitting and laundering $1,500 worth of Bitcoins. He sold them to undercover detectives who told him they wanted to use the money to buy stolen credit card numbers.
Huffington Post calls the case a legal win for cryptocurrency
We have to remember, Bitcoin is only seven years old. It was created and released to the world by an unknown person, or persons, in 2009. Ethereum is only one year old. It was invented by a 22 year old. So it's probably a good sign to see this humility from a state judge: we just don't know what cryptocurrency is, exactly.