Friday, August 9, 2013

Judge to Bitcoin: You Are Money

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BY CADE METZ 08.08.136:30 AM. Trendon Shavers recently turned up in a Texas courtroom, arguing that Bitcoin is not money. Well, it may have been his lawyer making the case. But you get the idea.

The dispute started earlier this summer, when the SEC charged the 30-year-old Shavers with using the digital currency to run a Ponzi scheme that amassed the equivalent of about $5 million. But when the matter came before a court in the Eastern District of Texas, Shavers insisted that Bitcoin is not subject to regulation by the United States; that his now-defunct business, Bitcoin Savings & Trust, never saw any money change hands; and that the SEC therefore has no right to hit him with a lawsuit.

The court did not embrace this idea. On Tuesday, Judge Amos Mazzant ruled that Bitcoin is indeed money. “It can be used to purchase goods or services, and as Shavers stated, used to pay for individual living expenses,” the judge wrote. And because it’s money, the judge ruled, the Bitcoins pumped into Shavers’ operation “meet the definition of investment contract, and as such, are securities” — and that means the SEC can proceed.

The sky is blue. The world is round. And Bitcoin is a functional form of value exchange that is subject to regulation.

“This isn’t that shocking,” says Patrick Murck, legal counsel for the Bitcoin Foundation, the independent Bitcoin watchdog. “If anyone wants to run a Ponzi scheme in Bitcoin, they can expect to get busted. If you run a Ponzi scheme anywhere, you’re gonna get busted — and you should. Bitcoin isn’t some sort of silver bullet that somehow ameliorates all the legal concern around your otherwise illegal activity.” - Read more here: http://www.wired.com/wiredenterprise/2013/08/court-says-bitcoin-is-money

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