Bitcoin has been called a key to the future of finance, but a Florida judge says the virtual currency is not real money.
"Bitcoin may have some attributes in common with what we commonly refer to as money, but differ in many important aspects," Judge Teresa Mary Pooler of the Miami-Dade state circuit court ruled this week. "They are certainly not tangible wealth and cannot be hidden under a mattress like cash and gold bars."
So then what is bitcoin?
Bitcoin is a type of virtual currency known as cryptocurrency that allows users to spend money electronically. It’s also decentralized, meaning it isn’t controlled by one central authority.
The defendant in the case, Michell Espinoza, was accused of selling $1,500 worth of bitcoins to undercover detectives who said they told the man they intended to buy stolen credit card numbers with it, the Miami Herald reported.
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In throwing out the charges against Espinoza, Pooler wrote in her ruling that it wasn't clear if Florida's law on money laundering even applies to bitcoin. “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,” Pooler wrote.
As bitcoin gains popularity as a method of payment, regulators have been grappling with how it should be regulated. Since it’s anonymous, bitcoin has become a popular choice for people buying drugs or other illegal items online.
However, it's also often used by merchants selling legal goods and services, and it has been touted as a good solution for small-scale, cross-border transactions. Fortune reports that the IRS has declared that bitcoin will be taxed and treated as property, and the U.S. Commodities Futures Trading Commission has said that for regulatory purposes, it defines virtual currencies as commodities.
“The Florida Legislature may choose to adopt statutes regulating virtual currency in the future," Pooler wrote. "At this time, however, attempting to fit the sale of bitcoin into a statutory scheme regulating money services businesses is like fitting a square peg into a round hole."
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