In news broken by Stephen D Palley, a Washington DC-based lawyer, a Federal Court in the US State of Michigan has passed down a ruling that says Bitcoin [BTC] constitutes money. The development marks a positive step towards the wider adoption and recognition of cryptocurrency in the public sphere.
Palley is a partner at the law offices of Anderson Kill and is also the co-chair of the firm’s Blockchain and Virtual Currency Group. The ruling was made by the Southern Division of the US District Court for the Eastern District of Michigan over a case where the defendant was charged with a money laundering scheme involving hundreds of thousands of dollars worth of Bitcoin.
In the aforementioned case, the defendant had been charged with facilitating the trade of Bitcoins without having registered with the State as a money transmitter. However, the defendant contrarily argued that any such question of registration as a money transmitter was unwarranted as Bitcoins didn’t qualify as money under the federal statute 18 U.S.C. § 1960. The statute concerns itself with unlicensed money transmission.
Using the statute’s definition of money as anything that is considered and used as a medium of exchange, a measure of value and means of payment, the Court, based its ruling on previous Federal Court cases such as United States v Murgio and United States v. Feialla and unambiguously stated that Bitcoin qualifies as money.
To support its ruling, the Court also relied on the interpretive guidance issued by the Financial Crimes Enforcement Network, a wing of the US Treasury. Under the said guidance, the defendant’s actions of facilitating the movement and trade of Bitcoins are considered to be acts of ‘money transmission’. The FinCen guidance is also one that considers any virtual currency, including Bitcoins, as money, lending weight to the Court’s ruling. The guidance, although not carrying the force of law, is nonetheless persuasive, the Court stated.
Judge Victoria Roberts of the Court finally also ruled that the rule of lenity, a rule that asks the Court to rule in favor of the defendant if the law is ambiguous, is not applicable as the statute in question is very clear to the Court’s mind.
The present ruling comes in the middle of a wave of actions taken by states across the United States to make way for cryptocurrencies and blockchain technology. The State of Wyoming had only a few days ago, passed a bill in the House that recognized Bitcoin and other cryptocurrencies. A similar bill has also passed the House sub-committee in the state of New Hampshire.