Stephen D Palley is a lawyer in private practice in Washington, DC, focusing on construction, insurance and software development, including blockchain and smart contract design.
In this opinion piece, Palley argues that a recent court case in which bitcoin was deemed not be "money" has questionable precedential value despite claims to the contrary. A Miami, Florida, trial court recently dismissed a criminal case against a defendant who had sold bitcoin to a police detective as part of an undercover investigation. The case, Florida v Espinosa , has been already been cited by some potentially important precedent for future cases, particularly those where bitcoin’s status as "money" or "currency" is at issue. Bitcoin industry advocates will also cite the case when arguing for legislative reform and greater regulatory clarity.
But, as legal precedent, Espinosa ‘s value may be limited. It’s a single decision from a Florida state court trial judge regarding state specific statutes.
It’s not an appeals court decision. It’s not binding "precedent" in any other state or in Federal Court. Half of the opinion has to do with proving criminal intent, but little to do with bitcoin.
Finally, the Court’s analysis of whether bitcoin constitutes "money" or "currency" differs from approaches other courts have taken, and may (or may not) be adapted in other circumstances. The analysis
Precedential or not, the case illustrates how courts apply well-established legal principles and procedures to new technologies. Consider how the court reached its conclusion.
It’s a process familiar to anyone who has read a case or two. Find the facts, then apply the law, render judgment.
Count I of the criminal information charged the defendant as an unlicensed "money transmitter" because he’d sold bitcoin to an undercover detective for dollars.The court dismissed these charges, holding that: > The statute didn’t apply to a direct transaction […]
