Business 1 February 2019Dan Taylor
Florida court: Police can crack down on unregulated crypto transactions
A court in Florida has ruled police can arrest an individual who sold Bitcoin Core (BTC) to an undercover officer in a sting operation, in a judgement expected to make it easier to prosecute unregulated cryptocurrency transactions in future.
Police in Miami Beach tempted the defendant, Michell Espinoza, to sell BTC in an unregulated deal, presenting ‘smoking gun’ evidence for prosecution.
In court, Espinoza argued that BTC was not considered money under Florida law. The charges relate to an amount equivalent to $1,500, from which Espinoza netted around $83.
The Third District Court of Appeal overturned the decision of the previous case, finding that the judge was wrong to dismiss felony charges brought against Espinoza when he likened BTC to “poker chips that people are willing to buy from you.”
The judge held that as a form of money transmission, Espinoza should have been held liable, because he should have been registered with the appropriate agency, the Office of Financial Regulation.
Describing Espinoza’s enterprise as a “business,” the judge said there was a requirement to register as a payment instrument seller and money transmitter.
According to the ruling, “Espinoza’s bitcoins-for-cash business requires him to register as a payment instrument seller and money transmitter…not merely selling his own personal bitcoins, he was marketing a business.”
Professor of economics at Barry University, Charles Evans, said this was reflective of the increasing confidence of law enforcement in cryptocurrency cases. He was quoted by the Miami Herald as saying, “The Wild West days are over. The regulators and prosecutors are trying to bring order to all the chaos — and this is part of the process.”
The judgement is particularly significant because it sets a precedent for future cases, effectively authorizing police to bring charges against those found to be engaging in unregulated transactions.
It comes at a time of increasing law enforcement efforts, designed to tighten up restrictions around cryptocurrency trading and exchange.
With cryptocurrency still in a legal grey area in Florida and other states, the case highlights the ongoing need for more defined regulation, specifically dealing with BTC and other cryptocurrency transactions.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
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