On Monday, a Florida judge dismissed charges of money laundering against a bitcoin seller, finding that state law does not apply to the cryptocurrency, setting a precedent that many in the legal community believe may increase illicit activities conducted using the virtual payment system.
Michell Espinoza was charged with three felony charges related to money laundering in 2014, but testimony by an economics professor appears to have cleared him of any wrongdoing, at least in the legal sense of the word.
Barry University Professor Charles Evans argued that rather than thinking about bitcoin as money, under which interpretation Espinoza would be facing several years in prison, the cryptocurrency is instead more akin to “poker chips that people are willing to buy from you,” reported the Miami Herald.
Calling the case "the most fascinating thing I’ve heard in this courtroom in a long time," Miami-Dade Circuit Judge Teresa Mary Pooler found that the cryptocurrency does not legally constitute "tangible wealth" because it "cannot be hidden under a mattress like cash and gold bars," reported the Herald.
Pooler also argued that because bitcoins have not been codified by government or backed by a financial institution, it cannot be subjected to money laundering statutes, despite that bitcoin owners are able to convert the cryptocurrency into cash through a number of exchanges.
"This court is not an expert in economics, however, it is very clear, even to someone with limited knowledge in the area, the bitcoin has a long way to go before it is the equivalent of money," Pooler wrote in her decision. "This court is unwilling to punish a man for selling his property to another, when his actions fall under a statute that is so vaguely written that even legal professionals have difficulty finding a singular meaning."
The 33-year-old Espinoza was originally charged after detectives purchased $1,500 worth of bitcoins from him, claiming they wanted to use the currency to purchase stolen credit card numbers.
Espinoza’s business partner, Pascal Reid, was also arrested but pleaded guilty early on, of acting as an unlicensed money broker. Under the deal, which may ultimately be invalidated in the wake of Monday’s ruling, Reid is required to serve a probation sentence and educate law enforcement on bitcoin.
A single bitcoin is currently trading for $656 on the Coinbase cryptocurrency exchange, after a recent price surge that has bolstered confidence in the virtual payment system.