Florida judge rules Bitcoin is not a currency for now, may push for legislation to protect consumers

A Miami judge has dismissed charges against a bitcoin seller who was indicted in 2014 for illegal money transmission and money laundering.

Judge Teresa Mary Pooler noted that Bitcoin is not regulated under Florida’s legal system and does not constitute currency, and in today’s ruling, she said that Bitcoin seller Michell Espinoza did not qualify as a money transmitter.

Observers believe that the ruling shows that Florida statutes do not account for Bitcoin and digital currencies, a gap that may eventually push Florida and even other states to legislate on digital currencies.

It is reported that the case dates back to the end of 2013, when the Miami Police Department and the US Secret Service task force began investigating Bitcoin trading activities in the Miami area.

Detective Ricardo Arias and Special Agent Gregory Ponzi contacted Espinoza through the bitcoin exchange LocalBitcoins and arranged several meetings between January and February 2014.

During these meetings, undercover agents indicated that they intended to use digital currency to purchase stolen credit card numbers. Eventually, Espinoza was caught in the act of selling Bitcoin (after he sold $1,500 in Bitcoin to agents).

However, in his ruling, Justice Poole found that Espinoza had not engaged in any illegal activity, neither money laundering nor money transmitters.

On the latter point, in Judge Poole's view, Espinoza was simply directly promoting his Bitcoin.

"The courts will not punish a person for selling his property to another person," Pooler wrote. "His actions do not fall under any prior law, and even legal professionals have difficulty finding separate legislation."

Elsewhere, Judge Pooler suggested that Florida lawmakers may be looking to push for legislation that encompasses bitcoin and digital currencies to address similar issues.

“The Florida Legislature may adopt laws in the future to regulate virtual currencies,” she wrote.

Espinoza did not immediately respond to a request for comment.

Bitcoin is not money, judge rules

In his ruling, Judge Pooler believes that it is currently difficult for courts to accurately define Bitcoin.

“Currently, there is nothing in our frame of reference that allows us to accurately define or describe Bitcoin,” she wrote.

“The court is not an expert in economics, but it is clear that even someone with very limited knowledge in this area would understand that Bitcoin has a long way to go before it can be considered a currency equivalent.”

Judge Pooler noted in her ruling that the state could potentially change the current situation through legislative action to create a specific legal definition for Bitcoin, a move she noted could prevent similar cases from occurring.

“There is no evidence that the defendant did anything wrong, other than selling the bitcoin to a cop,” she said. “We hope that the Florida legislature or the court of appeals will move forward with legislation so that individuals can trust that their actions were legal and not get caught.”