Federal Judge claims Bitcoins are currency and can be regulated under U.S. Law
The Unhived Mind
Sorry, libertarians: Bitcoins are currency and can be regulated under U.S. law, says judge
Brad Chacos
@BradChacos Aug 8, 2013 7:11 AMprint
On paper, Bitcoins sound like a libertarian’s dream: A virtual crypto-currency that’s veiled in anonymity, free from ties to national governments, and wonderfully bereft of transaction fees? Take that, The Man! But now that Bitcoins have been thrust into the limelight, The Man is starting to take back. Earlier this week, a federal judge in Texas ruled that Bitcoins are indeed a currency, and therefore subject to government regulation.
The judgment didn’t occur in a vacuum. Judge Amos Mazzant came to the determination during a case against Bitcoin Savings and Trust, a hedge fund that “raised at least 700,000 Bitcoin in BTCST investments, which amounted to more than $4.5 million based on the average price of Bitcoin in 2011 and 2012 when the investments were offered and sold,” according to the U.S. Security and Exchange Commission. When the SEC filed the case, 700,000 Bitcoins were worth in excess of $60 million.
But all those digital dollars weren’t invested in earnest, and the SEC alleges that BS&T operator Trendon Shavers defrauded his investors. Shavers’ defense? Bitcoins aren’t money, so shove it, SEC.
Judge Mazzant’s finding squashed that argument, as Ars Technica first reported. Here’s what His Honor had to say:
It is clear that Bitcoin can be used as money. It can be used to purchase goods or services, and as Shavers stated, used to pay for individual living expenses. The only limitation of Bitcoin is that it is limited to those places that accept it as currency. However, it can also be exchanged for conventional currencies, such as the U.S. dollar, Euro, Yen, and Yuan. Therefore, Bitcoin is a currency or form of money, and investors wishing to invest in BTCST provided an investment of money .
Note, however, that Mazzant’s ruling doesn’t appear to give the SEC the power to directly regulate Bitcoin trading; the SEC has always overseen security investments such as the one offered by BS&T.
An infographic explaining how Bitcoin works. (Click to enlarge.)
This isn’t the first legal blow against Bitcoin’s Randian ideals. Earlier this year, the U.S. Financial Crimes Enforcement Network said that Bitcoin exchanges are considered money service businesses under U.S. law. Shortly thereafter, the government seized assets from Mt. Gox, the largest Bitcoin exchange in the land, for failing to properly register as a money transmitting business.
Mt. Gox got its paperwork in order lickity-split, but one thing is clear: If Bitcoins are the currency of choice for a computerized Wild West, the sheriff is pushing hard to impose some order amongst the chaos.
theunhivedmind says:
The dealings of Bitcoin are of no business to the U.S Treasury, they may like to claim they are so they can takeover in order to control Bitcoin. All this is so The Worshipful Company of Mercers have no competition. When you hear stories of money-laundering this is simply just attack propaganda to aid attempts to force regulation and thus infiltration and controls onto Bitcoin. The biggest money-launderers are the global stock markets on a daily basis usually cleaned up currency from the dope trade run by The Worshipful Company of Apothecaries for the House of Bourbon. Banks like HSBC, Barclays, Bank of America and Deutsche Bank are the worse offenders of money-laundering but this is acceptable since it is all for the Mercers and the Empire.
What is needed right now, is for Bitcoin to drop Mercers currency conversions and stick just with Bitcoin payments. You will have to find a way to earn your Bitcoins externally away from currency. You could use bullion as a go between where by you buy the physical bullion with currency and then pay for your Bitcoins with bullion. Physical bullion is lawful real money that you also have equitable and legal title to meaning you own your bullion. With the Mercers debt instruments of today you only have equitable title to the toilet paper promissory IOUs which means just a right-to-use but never own.
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