A US appeals court ruled this week that a Miami Beach man can be prosecuted for selling Bitcoin to an undercover detective. This decision makes it easier for Florida law enforcement to target people who buy and sell virtual currencies in unregulated deals.
The Third District Court of Appeal ruled that Miami judge, Teresa Mary Pooler, was wrong in 2016 to dismiss felony charges against Michell Espinoza. Mr Espinoza, a website designer, was charged with illegally transmitting and laundering $1,500 worth of bitcoins. The undercover detective who approached him to buy Bitcoin claimed he’d use the cryptocurrency to buy credit card numbers stolen by Russian hackers.
At the time, Espinoza’s defense team challenged the prosecution, arguing that Bitcoin is not actually money under Florida law. Judge Pooler threw out the charges, agreeing with a defense expert who said bitcoins are nothing more than “poker chips that people are willing to buy from you.”
The appeals court has now ruled that he was indeed engaged in unregulated “money transmitting” and should have registered with Florida’s Office of Financial Regulation.
Florida Ruling Means Traders Must Register To Avoid Unregulated Bitcoin Sales
“Espinoza’s bitcoins-for-cash business requires him to register as a payment instrument seller and money transmitter” under Florida law, the court ruled, adding he was “not merely selling his own personal bitcoins, he was marketing a business”.
Charles Evans, a Barry University economics professor who served as a defence witness, disagreed with the decision but said it shows the “virtual currency industry is finally starting to grow up”. He added: “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”.
According to John Londot, a Tallahassee lawyer who’s part of the Digital Currency & Ledger Defense Coalition, noted that most of his clients have already registered as money transmitters, as “that’s been the trend in Florida”.The felony charges against Espinoza will now be reinstated and could mean those selling Bitcoin in the state of Florida will have to register with Florida’s Office of Financial Regulation to avoid a similar situation. No trial date has been set.