So if all of this constituting BTC as 'money', how come the US is trying to tax it as "Property" ?
If you don't think your money is your property, I'll be happy to take it off of your hands. In this case, I will gladly take both your fiat and your crypto. 
Topic: 4 Court Cases Helping Shape the US Stance on Bitcoin | Coindesk Report (Read 2001 times)
October 09, 2014, 10:54:07 AM
October 09, 2014, 10:28:28 AM
So if all of this constituting BTC as 'money', how come the US is trying to tax it as "Property" ?
September 29, 2014, 10:08:35 AM
I really think that Karl Lentz is onto something - http://www.broadmind.org/. Properly used, the common law system in the U.S. can overcome virtually all of the U.S. Government charges regarding Bitcoin or anything else, if there isn't any harmed human being, damaged property, or contract that has been broken.
The fact that Americans and others who live or vacation on American land, often lose to charges made by the U.S. or State governments, has to do with the people inadvertently and unknowingly agreeing with those charges. If the people realized what they were doing, there is a lot they could do to protect themselves, using common law.
The fact that Americans and others who live or vacation on American land, often lose to charges made by the U.S. or State governments, has to do with the people inadvertently and unknowingly agreeing with those charges. If the people realized what they were doing, there is a lot they could do to protect themselves, using common law.
September 29, 2014, 05:32:24 AM
In criminal cases, the definition of money can be different than the IRS's definition. This is not surprising or bad. In the US, the IRS treatment of bitcoin as capital is definitely better than treating it as money for now. While it could be treated slightly differently than most assets and be better, treating it as money would have several negative effects and may not even provide the positive effects several non-accountant posters on this forum clearly believe it would. Yen is money, and if a US citizen trades or exchanges more than a certain amount of actual Yen, he has to pay high taxes accordingly, regardless of how long the Yen were held, not getting to claim a loss would be high taxes at $0 in this scenario. OTOH, if the same US citizen buys a Yen ETF and holds it for more than a year, he can pay less (or no) tax on any earnings AND even if he holds it less than a year, he can claim losses to reduce his taxes. However, this is all about income and not about criminal law at all. I don't know whether the judges are making the right decisions, but the lawyers in the defense certainly are not, because the IRS, FinCen, and criminal law do not have to use the same definitions of terms like "money" or "currency" which don't even have to have the same definitions. On that note...
Disclaimer: In instances where I used the word "money" or "currency," I may not have used the correct term consistently or even at all throughout this post.
Disclaimer: In instances where I used the word "money" or "currency," I may not have used the correct term consistently or even at all throughout this post.
September 29, 2014, 01:13:56 AM
In a legal system based on precedents, the way in which these cases are closed is critical to setting the right context and incentives for the ecosystem. Hope the courts get the balance right between consumer protecting and backing innovation.
September 29, 2014, 01:11:21 AM
While the bitcoin economy is currently backed by $284m in venture capital and has a growing band of high-profile supporters, it still operates in a regulatory grey area in its largest market.
Unsurprisingly, just how the US will and should choose to regulate the digital currency is the subject of a continuing debate throughout all sectors of the ecosystem.
But, while the media focuses largely on policymakers like those currently making waves in New York, the country’s courts may yet prove to have a deciding influence on the legal future of bitcoin.
Last week Trendon Shavers made headlines when he was fined $40m for defrauding investors in a bitcoin Ponzi scheme. The case, brought by the Securities and Exchange Commission (SEC) in July 2013, created a broad first precedent for bitcoin when the judge ruled that bitcoin is a currency and a form of money.
Other cases could also have far reaching ramifications for the world of cryptocurrency. Below are the top court cases and rulings to date that are helping shape the US view on bitcoin.
SEC vs Trendon Shavers
Shavers, the operator of the Bitcoin Savings and Trust (BTCST), came under fire in the case against the SEC for soliciting illicit investments in bitcoin-related opportunities from a number of lenders. In total, he fraudulently accumulated 700,000 BTC in funds, an amount worth about $64m at the time of the arrest.
The ruling defied the March 2013 FinCEN guidance declaration that bitcoin is not considered a currency under the Bank Secrecy Act as it is not legal tender.
In a court document, Texas magistrate judge Amos L Mazzant said:
“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. […] it can also be exchanged for conventional currencies, such as the US 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.”
The case also provided insight into how bitcoin-denominated damages may be assessed in the future, with the judge using the average daily price of bitcoin at the time the scheme was uncovered.
US vs Faiella
In August, US District Judge Jed Rakoff ruled that bitcoin is money during a case which sought to assess whether Charlie Shrem, CEO of defunct bitcoin exchange BitInstant, allegedly acted with Robert Faiella to supply bitcoins to Silk Road users.
The two were charged with two counts of operating an unlicensed money transmitting business, one count of money laundering conspiracy and one count of willful failure to file a suspicious activity report.
Rakoff rejected Faiella’s reasoning that bitcoins are not money and that his money transmission charges should therefore be cleared, saying:
“Money in ordinary parlance means ‘something generally accepted as a medium of exchange, a measure of value, or a means of payment’. Bitcoin clearly qualifies as ‘money’.”
Both defendants plead guilty to the charges, ultimately agreeing to pay nearly $1m in fines.
State of Florida vs Espinoza
Last month, the Bitcoin Foundation filed an amicus brief in the case of Florida resident Pascal Reid, seeking to dismiss a money transmission charge.
In February, Reid and Michell Abner Espinoza were arrested in sting operations in which they engaged in fake transactions with undercover agents through online marketplace LocalBitcoins.com and converted $30,000 of cash into bitcoin.
They were charged under Florida’s anti-money laundering law, which prohibits exchanges and business transactions over $10,000, and the unlicensed money transmission law, which permits currency or payment instruments to a maximum of $20,000 in a 12-month period.
The foundation believes that since the money transmission law applies specifically to corporations and entities qualified to do business in the state, Reid should be cleared of the charges. Further, as Florida is as yet undecided on how to regulate bitcoin, the state should not apply an “ambiguous criminal statute”.
The amicus brief allows the Bitcoin Foundation to help ensure a case outcome that sets favorable precedent for the broader bitcoin community, and does not mean that the organisation supports Reid directly.
Both defendants have filed to have the money laundering charges dismissed, invoking the Internal Revenue Service (IRS) guidance that bitcoin is not money.
US vs Ross William Ulbricht
The Ross Ulbricht camp made a similar appeal in late March, citing flaws in the legal definition of money laundering.
Ulbricht is accused of heading the now-defunct online black market Silk Road. In February he was indicted on charges of computer hacking, drug trafficking, money laundering and engaging in a criminal enterprise.
Judge Katherine Forrest rejected the argument that bitcoin is not money, saying:
“Bitcoins carry value – that is their purpose and function – and act as a medium of exchange. Bitcoins may be exchanged for legal tender, be it US dollars, euros, or some other currency. Accordingly, [the defense’s] argument fails.”
Challenging the grounds that bitcoin doesn’t fall under the definition of legal money, she later wrote:
“There is no doubt that if a narcotics transaction was paid for in cash, which was later exchanged for gold, then converted back to cash, that would constitute a money laundering transaction. One can launder money using bitcoin.”
Ulbricht faces a series of new charges filed against him on 21st August, including narcotics trafficking, conspiracy to traffic fraudulent identification documents and distribution of narcotics by means of the Internet.
Ulbricht has pleaded not guilty on all charges. His trial is set for 3rd November.
SOURCE "http://www.coindesk.com/4-court-cases-helping-determine-us-stance-bitcoin/"
Unsurprisingly, just how the US will and should choose to regulate the digital currency is the subject of a continuing debate throughout all sectors of the ecosystem.
But, while the media focuses largely on policymakers like those currently making waves in New York, the country’s courts may yet prove to have a deciding influence on the legal future of bitcoin.
Last week Trendon Shavers made headlines when he was fined $40m for defrauding investors in a bitcoin Ponzi scheme. The case, brought by the Securities and Exchange Commission (SEC) in July 2013, created a broad first precedent for bitcoin when the judge ruled that bitcoin is a currency and a form of money.
Other cases could also have far reaching ramifications for the world of cryptocurrency. Below are the top court cases and rulings to date that are helping shape the US view on bitcoin.
SEC vs Trendon Shavers
Shavers, the operator of the Bitcoin Savings and Trust (BTCST), came under fire in the case against the SEC for soliciting illicit investments in bitcoin-related opportunities from a number of lenders. In total, he fraudulently accumulated 700,000 BTC in funds, an amount worth about $64m at the time of the arrest.
The ruling defied the March 2013 FinCEN guidance declaration that bitcoin is not considered a currency under the Bank Secrecy Act as it is not legal tender.
In a court document, Texas magistrate judge Amos L Mazzant said:
“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. […] it can also be exchanged for conventional currencies, such as the US 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.”
The case also provided insight into how bitcoin-denominated damages may be assessed in the future, with the judge using the average daily price of bitcoin at the time the scheme was uncovered.
US vs Faiella
In August, US District Judge Jed Rakoff ruled that bitcoin is money during a case which sought to assess whether Charlie Shrem, CEO of defunct bitcoin exchange BitInstant, allegedly acted with Robert Faiella to supply bitcoins to Silk Road users.
The two were charged with two counts of operating an unlicensed money transmitting business, one count of money laundering conspiracy and one count of willful failure to file a suspicious activity report.
Rakoff rejected Faiella’s reasoning that bitcoins are not money and that his money transmission charges should therefore be cleared, saying:
“Money in ordinary parlance means ‘something generally accepted as a medium of exchange, a measure of value, or a means of payment’. Bitcoin clearly qualifies as ‘money’.”
Both defendants plead guilty to the charges, ultimately agreeing to pay nearly $1m in fines.
State of Florida vs Espinoza
Last month, the Bitcoin Foundation filed an amicus brief in the case of Florida resident Pascal Reid, seeking to dismiss a money transmission charge.
In February, Reid and Michell Abner Espinoza were arrested in sting operations in which they engaged in fake transactions with undercover agents through online marketplace LocalBitcoins.com and converted $30,000 of cash into bitcoin.
They were charged under Florida’s anti-money laundering law, which prohibits exchanges and business transactions over $10,000, and the unlicensed money transmission law, which permits currency or payment instruments to a maximum of $20,000 in a 12-month period.
The foundation believes that since the money transmission law applies specifically to corporations and entities qualified to do business in the state, Reid should be cleared of the charges. Further, as Florida is as yet undecided on how to regulate bitcoin, the state should not apply an “ambiguous criminal statute”.
The amicus brief allows the Bitcoin Foundation to help ensure a case outcome that sets favorable precedent for the broader bitcoin community, and does not mean that the organisation supports Reid directly.
Both defendants have filed to have the money laundering charges dismissed, invoking the Internal Revenue Service (IRS) guidance that bitcoin is not money.
US vs Ross William Ulbricht
The Ross Ulbricht camp made a similar appeal in late March, citing flaws in the legal definition of money laundering.
Ulbricht is accused of heading the now-defunct online black market Silk Road. In February he was indicted on charges of computer hacking, drug trafficking, money laundering and engaging in a criminal enterprise.
Judge Katherine Forrest rejected the argument that bitcoin is not money, saying:
“Bitcoins carry value – that is their purpose and function – and act as a medium of exchange. Bitcoins may be exchanged for legal tender, be it US dollars, euros, or some other currency. Accordingly, [the defense’s] argument fails.”
Challenging the grounds that bitcoin doesn’t fall under the definition of legal money, she later wrote:
“There is no doubt that if a narcotics transaction was paid for in cash, which was later exchanged for gold, then converted back to cash, that would constitute a money laundering transaction. One can launder money using bitcoin.”
Ulbricht faces a series of new charges filed against him on 21st August, including narcotics trafficking, conspiracy to traffic fraudulent identification documents and distribution of narcotics by means of the Internet.
Ulbricht has pleaded not guilty on all charges. His trial is set for 3rd November.
SOURCE "http://www.coindesk.com/4-court-cases-helping-determine-us-stance-bitcoin/"
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