Topic: Bitcoin is Money, says Federal Court - page 2. (Read 4765 times)
My taxing authority just told me Bitcoin is not money, and they will not accept it.
Bitcoin was already deemed money when FINCEN started requiring MSB filings.
The interesting part of this ruling is that all the complex products out there that are derived from bitcoin will now be under regulation by the SEC. Companies like ASICminer with public exchanges of their shares paying out dividends will now be subject to SEC regulations. The exchanges allow for these securites to trade will now also have rules and regulations to comply with. Any sites offering CD's or notes that pay interest will also have to pay close attention to the regulations they fall under.
I can see the argument being made that perhaps these securites are offered and solicited on the web in countries outside the SEC's jurisdiction, but any US based site or service will absolutely need to reassess whether or not they are complying with regulations.
Very interesting indeed.
The interesting part of this ruling is that all the complex products out there that are derived from bitcoin will now be under regulation by the SEC. Companies like ASICminer with public exchanges of their shares paying out dividends will now be subject to SEC regulations. The exchanges allow for these securites to trade will now also have rules and regulations to comply with. Any sites offering CD's or notes that pay interest will also have to pay close attention to the regulations they fall under.
I can see the argument being made that perhaps these securites are offered and solicited on the web in countries outside the SEC's jurisdiction, but any US based site or service will absolutely need to reassess whether or not they are complying with regulations.
Very interesting indeed.
I agree with all of this, except for the first part. The FinCEN guidance absolutely, categorically did not say that Bitcoin was money. Hence the gravity of this development.
Very interesting.
Thanks for the clarification.
Thanks for the clarification.
Bitcoin was already deemed money when FINCEN started requiring MSB filings.
The interesting part of this ruling is that all the complex products out there that are derived from bitcoin will now be under regulation by the SEC. Companies like ASICminer with public exchanges of their shares paying out dividends will now be subject to SEC regulations. The exchanges allow for these securites to trade will now also have rules and regulations to comply with. Any sites offering CD's or notes that pay interest will also have to pay close attention to the regulations they fall under.
I can see the argument being made that perhaps these securites are offered and solicited on the web in countries outside the SEC's jurisdiction, but any US based site or service will absolutely need to reassess whether or not they are complying with regulations.
Very interesting indeed.
The interesting part of this ruling is that all the complex products out there that are derived from bitcoin will now be under regulation by the SEC. Companies like ASICminer with public exchanges of their shares paying out dividends will now be subject to SEC regulations. The exchanges allow for these securites to trade will now also have rules and regulations to comply with. Any sites offering CD's or notes that pay interest will also have to pay close attention to the regulations they fall under.
I can see the argument being made that perhaps these securites are offered and solicited on the web in countries outside the SEC's jurisdiction, but any US based site or service will absolutely need to reassess whether or not they are complying with regulations.
Very interesting indeed.
Neglected to post the link!
http://www.courthousenews.com/2013/08/06/Bitcoin.pdf
United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
SECURITIES AND EXCHANGE §
COMMISSION §
§
V. § CASE NO. 4:13-CV-416
§
TRENDON T. SHAVERS and BITCOIN §
SAVINGS AND TRUST §
MEMORANDUM OPINION REGARDING THE COURT’S
SUBJECT MATTER JURISDICTION
United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
SECURITIES AND EXCHANGE §
COMMISSION §
§
V. § CASE NO. 4:13-CV-416
§
TRENDON T. SHAVERS and BITCOIN §
SAVINGS AND TRUST §
MEMORANDUM OPINION REGARDING THE COURT’S
SUBJECT MATTER JURISDICTION
A Federal Court yesterday agreed with the SEC, holding that, for the purposes of the definition of a security, Bitcoin is money:
The SEC argues that the BTCST investments are both investment contracts and notes, and, thus, are securities.
The term “security” is defined as “any note, stock, treasury stock, security future, security-based swap, bond…[or] investment contract…” 15 U.S.C. § 77b. An investment contract is any contract, transaction, or scheme involving (1) an investment of money, (2) in a common enterprise, (3) with the expectation that profits will be derived from the efforts of the promoter or a third party. SEC v. W.J. Howey & Co., 328 U.S. 293, 298-99 (1946); Long v. Shultz Cattle Co, 881 F.2d 129, 132 (1989). First, the Court must determine whether the BTCST investments constitute an investment of money. 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.
I don't think anyone should be surprised by this. Of course an investment denominated in BTC is still an investment. No surprise there. Unfortunately, this will have consequences far beyond the securities laws, and will spill into the payments sector. It is precedent, and regulators will likely refer to this opinion, and those following it, to support their regulation of bitcoin as a transmission of money.
TL;DR: Bitcoin is money now, for the purposes of the securities laws. MSB/MTB regulators will also likely rely on this opinion to support their regulation of Bitcoin activity in their jurisdiction, too.
http://www.courthousenews.com/2013/08/06/Bitcoin.pdf
The SEC argues that the BTCST investments are both investment contracts and notes, and, thus, are securities.
The term “security” is defined as “any note, stock, treasury stock, security future, security-based swap, bond…[or] investment contract…” 15 U.S.C. § 77b. An investment contract is any contract, transaction, or scheme involving (1) an investment of money, (2) in a common enterprise, (3) with the expectation that profits will be derived from the efforts of the promoter or a third party. SEC v. W.J. Howey & Co., 328 U.S. 293, 298-99 (1946); Long v. Shultz Cattle Co, 881 F.2d 129, 132 (1989). First, the Court must determine whether the BTCST investments constitute an investment of money. 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.
I don't think anyone should be surprised by this. Of course an investment denominated in BTC is still an investment. No surprise there. Unfortunately, this will have consequences far beyond the securities laws, and will spill into the payments sector. It is precedent, and regulators will likely refer to this opinion, and those following it, to support their regulation of bitcoin as a transmission of money.
TL;DR: Bitcoin is money now, for the purposes of the securities laws. MSB/MTB regulators will also likely rely on this opinion to support their regulation of Bitcoin activity in their jurisdiction, too.
http://www.courthousenews.com/2013/08/06/Bitcoin.pdf
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