Virtual currency. Photo: ShutterstockCourt Rules Bitcoin Qualifies as Money in Case of First Impression
The appellate court's opinion could open the door for cracking down on unregulated Bitcoin trading.
January 31, 2019 at 02:32 PM
2 minute read
The original version of this story was published on Daily Business Review
Florida's Third District Court of Appeal Wednesday ruled Bitcoin qualifies as money in a case that turned on whether digital currency is driving financial crime.
The appellate court's opinion reverses Miami-Dade Circuit Court Judge Teresa Pooler's 2016 finding that digital or cryptocurrency could not be considered money under Florida law. The case in question concerned Miami Beach resident Michell Espinoza, who was charged with two counts of money laundering and acting as an unauthorized money transmitter operating through digital currency-trading website, LocalBitcoins.com.
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Related story: Financial Crime Case May Hinge on Whether Bitcoin Is Money
Pooler's ruling had dismissed the charges against Espinoza. However, that reprieve might be short-lived in light of the appellate court's ruling. Although the district court opinion conceded Bitcoin “does not expressly fall under the definition of 'currency'” found in the Florida Statues, it held cryptocurrency does constitute a “payment instrument.”
“Included in the definition of a payment instrument is 'monetary value,' which is defined as 'a medium of exchange, whether or not redeemable in currency,'” the court wrote. “Similarly, Bitcoin and bitcoins function as a 'medium of exchange.' … Any assertion that 'monetary value is synonymous with 'currency' overlooks the express language contained in Section 560.103(21),which states that monetary value is 'a medium of exchange, whether or not redeemable in currency.'”
The Third DCA then remanded Espinoza's case for further proceedings. Its ruling in the case of first impression might pave the way for regulation of cryptocurrency transfers in Florida, as federal agencies and state banking regulators weigh whether Bitcoin trading constitutes money transmission.
Frank Prieto, Espinoza's attorney, did not respond to requests for comment. The Florida Attorney General's office also did not respond by press time.
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