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U.S. District Judge Says Bitcoin Qualifies as ‘Money’ or ‘Funds’

Avatar newsbtc 5 years ago

A U.S. District Judge has disagreed with arguments that bitcoin doesn’t qualify as money in an ongoing case relating to 54-year-old Florida man Robert Faiella.

Faiella’s legal counsel had attempted to make that cause that the defendant should have one of two charges against him dismissed (operating an unlicensed money transmitting business) because, well, bitcoin isn’t money.

But the Judge, Jed Rakoff, swatted down the argument, stating that bitcoin “clearly qualifies as ‘money’ or ‘funds,'” by definition.

“Bitcoin can be easily purchased in exchange for ordinary currency, acts as a denominator of value, and is used to conduct financial transactions,” the Judge added.

Recently, legal counsel for the man accused of operating the Silk Road illicit online marketplace (Ross Ulbricht) attempted to make the same argument, using a recent Internal Revenue Service (IRS) guidance as support.

In that guidance, the IRS stated that for Federal tax purposes, bitcoin should be included as property.

New York District Judge Katherine B. Forrest denied the motion in similar fashion, and more similar reasons.

Faiella, along with another man, were caught in a sting involving authorities earlier this year. Both men had been selling bitcoins on the LocalBitcoins.com service.

In a trust-building transaction, authorities bought bitcoin from both men well above market rates. In a subsequent transaction, authorities reportedly told both men they would be using the bitcoin in order to purchase stolen credit card information, triggering their arrests.

Faiella’s case is U.S. v. Faiella, U.S. District Court, Southern District of New York, No. 14-cr-00243.

[textmarker color=”C24000″]Source[/textmarker] Reuters wire via Yahoo News [textmarker color=”C24000″]Image[/textmarker] Wikimedia/Thomaseagle

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