Topic: U.S. Judge determines bitcoin is a currency - page 3. (Read 6088 times)
I would imagine this throws a wrench in the Bitcoin ETF as they were trying to define Bitcoin as a commodity.
I think it is pretty clear in this context that the judge is right. It is hard to imagine any judge applying the Howey test getting hung up on a narrow definition of money.
It is important to keep in mind that the judge is merely confirming what everyone already knows, namely that bitcoin is used as money. In this case, he's deciding whether or not an "investment of money" was offered. The law in question is about regulating "investment of money", not about money itself.
I wouldn't read a whole lot into this. The judge isn't saying that bitcoin itself is a security subject to regulation under the Securities Act, just that contracts which would otherwise be covered by that act aren't excluded just because the money used isn't the dollar.
Right. An investment contract need not involve money. You can have a contract that trades one commodity for another. The Hovey case was like that - lease land to a grower, get a fraction of the produce back. There are oil leases where you lease land in exchange for a fraction of the oil produced. It is important to keep in mind that the judge is merely confirming what everyone already knows, namely that bitcoin is used as money. In this case, he's deciding whether or not an "investment of money" was offered. The law in question is about regulating "investment of money", not about money itself.
I wouldn't read a whole lot into this. The judge isn't saying that bitcoin itself is a security subject to regulation under the Securities Act, just that contracts which would otherwise be covered by that act aren't excluded just because the money used isn't the dollar.
Black's defines money as anything used as money, and currency as the subset of money that has been authorized by law. The is different from conventional usage which holds the two terms to be synonyms, only weakly defined.
This could set a precedent in one federal district. That could also be appealed and may end being interpreted differently in different federal districts.
It will be important for a direct case challenging regulation to be brought when the feds finally decide to actually take one of the exchanges to court.
I think it is pretty clear in this context that the judge is right. It is hard to imagine any judge applying the Howey test getting hung up on a narrow definition of money.
It is important to keep in mind that the judge is merely confirming what everyone already knows, namely that bitcoin is used as money. In this case, he's deciding whether or not an "investment of money" was offered. The law in question is about regulating "investment of money", not about money itself.
I wouldn't read a whole lot into this. The judge isn't saying that bitcoin itself is a security subject to regulation under the Securities Act, just that contracts which would otherwise be covered by that act aren't excluded just because the money used isn't the dollar.
If he used toothpicks instead of bitcoins, Judge would rule investment securities either way.
Right. The judge's opinion is simply that "Bitcoin investments met the requirements of an investment contract and thus constituted “securities” under federal securities laws." This is based on a Supreme Court decision: "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." That's Bitcoin. Deal with it.This has some implications. One is that anyone operating a "Bitcoin exchange" in the US will have to meet the SEC requirements for being a broker/dealer.
Would this apply to those that exchange Bitcoin<->USD and vice versa out in the open (Satoshi Square)? I'm thinkin of starting an open exchange where I live but don't want to get in trouble for it.
Currency vs. Legal Tender are world's apart. Let's keep this in mind.
Black's defines money as anything used as money, and currency as the subset of money that has been authorized by law. The is different from conventional usage which holds the two terms to be synonyms, only weakly defined.
This could set a precedent in one federal district. That could also be appealed and may end being interpreted differently in different federal districts.
It will be important for a direct case challenging regulation to be brought when the feds finally decide to actually take one of the exchanges to court.
If he used toothpicks instead of bitcoins, Judge would rule investment securities either way.
Right. The judge's opinion is simply that "Bitcoin investments met the requirements of an investment contract and thus constituted “securities” under federal securities laws." This is based on a Supreme Court decision: "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." That's Bitcoin. Deal with it.This has some implications. One is that anyone operating a "Bitcoin exchange" in the US will have to meet the SEC requirements for being a broker/dealer.
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If you exchange bitcoins for fiat currencies it is income regardless, and you will have to pay taxes on it with or without these type of rulings.
If you exchange bitcoins for fiat currencies it is income regardless, and you will have to pay taxes on it with or without these type of rulings.
And, depending on your jurisdiction, if you receive bitcoins for products or services (and never touch fiat) it is income regardless, and you will have to pay taxes on it with or without these type of rulings.
2. Bitcoin being defined as "currency" by a Federal Judge is actually bad as it opens Bitcoin up to a whole host of US laws designed to prevent people from creating their own currency. Can you say "Liberty Dollar".
This!
My thought exactly. If Bitcoin is considered money then that will automatically ruin its "decentralized" nature.
That is absolutely untrue and impossible. Bitcoin works on a p2p network there is no possible way to decentralize it. Why do you think torrents still exist?
If you exchange bitcoins for fiat currencies it is income regardless, and you will have to pay taxes on it with or without these type of rulings.
the sky is falling!! heh. please refer to FinCEN guidelines regarding Bitcoin/crytocurrencies which was issued few month ago, nothing has changed since then
this case is totally irrelevant to official status of bitcoin regardless of Shaver's defense strategy and claims, if he used toothpicks instead of bitcoins, Judge would rule investment securities either way.
this case is totally irrelevant to official status of bitcoin regardless of Shaver's defense strategy and claims, if he used toothpicks instead of bitcoins, Judge would rule investment securities either way.
2. Bitcoin being defined as "currency" by a Federal Judge is actually bad as it opens Bitcoin up to a whole host of US laws designed to prevent people from creating their own currency. Can you say "Liberty Dollar".
THIS should be the concern. Bitcoin being a currency means now the entire banking infra can enforce laws and policies on bitcoin. Welcome to fees, regulation, and loss of freedom.
You can't expect authorities to say "ok it's not money so we don't get power and fees"
but in this case it's correct, Bitcoin is used to buy things (->money, like gold coins in the past)
and pirateat40 sold... basically junk bonds (->securities)
http://www.law360.com/articles/462977
It's nice to see the U.S. courts acknowledge reality once in awhile.
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Internet-traded bitcoins are a form of currency . . . a Texas federal judge ruled Tuesday
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Bitcoin is a form of currency because it can be used to purchase goods or services and exchanged for more traditional forms of money, U.S. Magistrate Judge Amos L. Mazzant wrote in a decision Tuesday
It's nice to see the U.S. courts acknowledge reality once in awhile.
Honestly they don't care about bitcoins. by acknowledging this. they have a reason to tax bitcoin.
2. Bitcoin being defined as "currency" by a Federal Judge is actually bad as it opens Bitcoin up to a whole host of US laws designed to prevent people from creating their own currency. Can you say "Liberty Dollar".
This!
My thought exactly. If Bitcoin is considered money then that will automatically ruin its "decentralized" nature.
2. Bitcoin being defined as "currency" by a Federal Judge is actually bad as it opens Bitcoin up to a whole host of US laws designed to prevent people from creating their own currency. Can you say "Liberty Dollar".
THIS should be the concern. Bitcoin being a currency means now the entire banking infra can enforce laws and policies on bitcoin. Welcome to fees, regulation, and loss of freedom.
Black's defines money as anything used as money, and currency as the subset of money that has been authorized by law. The is different from conventional usage which holds the two terms to be synonyms, only weakly defined.
The judge in this case is clearly using the two words interchangeably, consistent with conversational English, and clearly also in the very broad definition that Black held for money.
If BTCST had traded in gold coins I would expect pretty much the same ruling. For that matter, if there was a community that used sheep as money, and he had run this scam on them, I'd fully expect the judge to interpret the "investment of money" fork of the Howey test through the victim's eyes and issue the same ruling.
Lawyers have an ethical duty to try every possible defense, so this question was inevitable. Of course, the answer was just as inevitable, as some of us have been saying for the last few years now. Courts mostly operate on value, and most of the value that they see is not granted by the decree of some authority, but by the perceptions of the parties involved.
Let all of the scammers be on notice. Your defense is now solely in your ability to keep your scams small enough that it isn't worth hunting you down. Your claims that it wasn't really theft/fraud/whatever because bitcoins aren't issued by the government will fall on deaf ears, and some of you are going to end up in prison......
The judge in this case is clearly using the two words interchangeably, consistent with conversational English, and clearly also in the very broad definition that Black held for money.
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It is clear that Bitcoin can be used as money. [...] The only limitation of Bitcoin is that it is limited to those places that accept it as currency.
If BTCST had traded in gold coins I would expect pretty much the same ruling. For that matter, if there was a community that used sheep as money, and he had run this scam on them, I'd fully expect the judge to interpret the "investment of money" fork of the Howey test through the victim's eyes and issue the same ruling.
Lawyers have an ethical duty to try every possible defense, so this question was inevitable. Of course, the answer was just as inevitable, as some of us have been saying for the last few years now. Courts mostly operate on value, and most of the value that they see is not granted by the decree of some authority, but by the perceptions of the parties involved.
Let all of the scammers be on notice. Your defense is now solely in your ability to keep your scams small enough that it isn't worth hunting you down. Your claims that it wasn't really theft/fraud/whatever because bitcoins aren't issued by the government will fall on deaf ears, and some of you are going to end up in prison......
.......if you live in the United States.
Black's defines money as anything used as money, and currency as the subset of money that has been authorized by law. The is different from conventional usage which holds the two terms to be synonyms, only weakly defined.
The judge in this case is clearly using the two words interchangeably, consistent with conversational English, and clearly also in the very broad definition that Black held for money.
If BTCST had traded in gold coins I would expect pretty much the same ruling. For that matter, if there was a community that used sheep as money, and he had run this scam on them, I'd fully expect the judge to interpret the "investment of money" fork of the Howey test through the victim's eyes and issue the same ruling.
Lawyers have an ethical duty to try every possible defense, so this question was inevitable. Of course, the answer was just as inevitable, as some of us have been saying for the last few years now. Courts mostly operate on value, and most of the value that they see is not granted by the decree of some authority, but by the perceptions of the parties involved.
Let all of the scammers be on notice. Your defense is now solely in your ability to keep your scams small enough that it isn't worth hunting you down. Your claims that it wasn't really theft/fraud/whatever because bitcoins aren't issued by the government will fall on deaf ears, and some of you are going to end up in prison.
The judge in this case is clearly using the two words interchangeably, consistent with conversational English, and clearly also in the very broad definition that Black held for money.
Quote
It is clear that Bitcoin can be used as money. [...] The only limitation of Bitcoin is that it is limited to those places that accept it as currency.
If BTCST had traded in gold coins I would expect pretty much the same ruling. For that matter, if there was a community that used sheep as money, and he had run this scam on them, I'd fully expect the judge to interpret the "investment of money" fork of the Howey test through the victim's eyes and issue the same ruling.
Lawyers have an ethical duty to try every possible defense, so this question was inevitable. Of course, the answer was just as inevitable, as some of us have been saying for the last few years now. Courts mostly operate on value, and most of the value that they see is not granted by the decree of some authority, but by the perceptions of the parties involved.
Let all of the scammers be on notice. Your defense is now solely in your ability to keep your scams small enough that it isn't worth hunting you down. Your claims that it wasn't really theft/fraud/whatever because bitcoins aren't issued by the government will fall on deaf ears, and some of you are going to end up in prison.
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Bitcoin is a form of currency because it can be used to purchase goods or services and exchanged for more traditional forms of money
Bullshit, the same apply to gold but gold IS NOT moneyhttp://www.forbes.com/sites/afontevecchia/2011/07/13/bernanke-fights-ron-paul-in-congress-golds-not-money/
And since bitcoin is, in my opinion, digital gold, i say that it is not money.
The same does not apply to gold because gold cannot be spent as a day to day currency as it is not accepted anywhere, because raw gold is unsuitable to be a currency in this age. Bitcoin however can already be used to purchase goods and services from a growing list of vendors. So yes, Bitcoin is currency. Gold is a store of wealth and speculative tool.
Bitcoin =/= Gold, stop comparing the two this way.
As far as ponzi schemes, it is a crime weather it was conducted in fiat or Bitcoin, I don't see why the means really matters in the eyes of the law. Pirate defrauded a bunch of people, and should be punished for it.
Interesting read. Anyone have link or access to the full article?
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Law360, Los Angeles (August 06, 2013, 9:03 PM ET) -- Internet-traded bitcoins are a form of currency subject to federal securities laws, a Texas federal judge ruled Tuesday, refusing to dismiss the U.S. Securities and Exchange Commission's claims accusing the founder of Bitcoin Savings & Trust of running a Ponzi scheme.
Bitcoin is a form of currency because it can be used to purchase goods or services and exchanged for more traditional forms of money, U.S. Magistrate Judge Amos L. Mazzant wrote in a decision Tuesday.
Bitcoin is a form of currency because it can be used to purchase goods or services and exchanged for more traditional forms of money, U.S. Magistrate Judge Amos L. Mazzant wrote in a decision Tuesday.
Looks like pirateat40's case is being tried in Texas.
If his best defense is that "Bitcoin is not real money" he needs to hire a new lawyer
He is representing himself
Representing yourself is a really good idea
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