Bitcoin, a form of virtual currency, was recently placed under scrutiny in a case of money laundering in South Florida. The man being accused, was a web designer named Michell Espinoza, who had transmitted $1,500 worth of this virtual "money." Espinoza sold the coins to undercover detectives who mentioned wanting to use them to purchase stolen credit card numbers. Following these circumstances, Espinoza was then charged with illegal money laundering.
Popular among computer engineers and some avid gamers, bitcoin is a form of virtual crypto-currency. The way to obtain a bitcoin is done through a type of virtual mining, deciphering a set of codes and then being awarded the payment. It isn't the only form of crypto-currency on the market but it is the most widely recognized. Those most familiar with bitcoin mining and trading have been following the legal case closely as the judge's ruling could have adverse effects on them.
In this case, Espinoza chose to sell his bitcoins for money. There is a general approximation of the worth of bitcoins in terms of the U.S. dollar, which can be accessed easily through a Google search, and it fluctuates from day-to-day just like any currency. In essence there is a price that is paid when selling them. However, was Espinoza breaking the law when he sold his items to individuals who were going to allegedly use them for crime?
Judge Rules on Bitcoin Money Laundering Question
After taking a close look at the charges that Espinoza was facing and doing more research on the crypto-currency, Judge Teresa Mary Pooler declared that bitcoin was not money. The charges against the accused were dropped, but a spokesperson for the Miami-Dade State Attorney's Office seeks to appeal the case.
Judge Pooler's reasoning, however, satisfied Espinoza's defense attorney. Judge Pooler explained that the bitcoin was not "tangible wealth" and also cannot be hidden beneath a mattress like gold bars. It is difficult to suggest that bitcoins can be used to promote illegal activity, because the idea of it as currency is too vague. Pooler is seemingly the first to hear a case of money laundering involving virtual currency in Miami, Florida.
Other Cases of Bitcoin "Misuse"
Bitcoins have previously been used anonymously on the black market. They have also been used in illegal drug trafficking. A separate South Florida case sent a man to jail for 10 years for using bitcoins to purchase synthetic heroin from a prisoner in Canada.
Law Enforcement is still trying to devise how to handle cases of bitcoin misuse, since certain circumstances declare bitcoin to be nothing more than property.
If you or anyone you know has faced any accusations in regards to laundering or white-collar crime, contact Spatz Law Firm. We specialize in such cases and can provide you with representation.
Bitcoin not money, Miami judge rules in dismissing laundering charges. (n.d.). Retrieved August 03, 2016, from http://www.miamiherald.com/news/local/crime/article91682102.html