Wikipedia calls Bitcoin a cryptocurrency (a currency that relies on cryptography), but now it’s official. A federal judge in Texas has declared that Bitcoin is a currency and should therefore be regulated just like U.S. dollars or gold. The ruling represents yet another attempt to regulate Bitcoin transactions, threatening the original purpose of the currency.
While it looks like a recognition that Bitcoins are worth something, the decision threatens once again Bitcoin’s utopian concept. As a reminder, the Department of Homeland Security recently issued a seizure warrant on Bitcoin exchange service Mt. Gox because it didn’t comply to money transfer regulations.
Today’s decision goes in the same direction. BTCST, a Bitcoin-based hedge fund, claimed that “the BTCST investments are not securities because Bitcoin is not money, and is not part of anything regulated by the United States,” wrote Judge Amos Mazzant. She then stated the exact opposite of BTCST’s defense:
First, the Court must determine whether the BTCST investments constitute an investment of money. It is clear that Bitcoin can be used as money. It can be used to purchase goods or services, and as Shavers stated, used to pay for individual living expenses. The only limitation of Bitcoin is that it is limited to those places that accept it as currency. However, it can also be exchanged for conventional currencies, such as the U.S. dollar, Euro, Yen, and Yuan. Therefore, Bitcoin is a currency or form of money, and investors wishing to invest in BTCST provided an investment of money.
Bitcoin was born on the idea that nobody could regulate it.[...]The only real value of a Bitcoin comes from its users. Because Bitcoin owners are treating it as a currency, it becomes one. That’s what makes it beautiful and scary at the same time. Yet, Bitcoin creator Satoshi Nakamoto probably didn’t think that even the U.S. government would treat it as a currency and try to regulate it.
Friday, August 9, 2013
The BIG Problem Behind a Federal Judge's Ruling That Bitcoin is Currency
Romain Dillett gets it:
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"Yet, Bitcoin creator Satoshi Nakamoto probably didn’t think that even the U.S. government would treat it as a currency and try to regulate it."
ReplyDeleteReally? Let me tell you about this waterfront property I have for sale in Florida. Or the bridge I have for sale in NYC.
Wait a minute. I thought alternative currencies were illegal in the U.S.?
ReplyDelete"Governments can regulate Bitcoin all they want. They can also regulate the sun, the rain, and the stars in thy sky." - Erik Voorhees
ReplyDelete"A judge says bitcoin is money. Doesn't matter. BTC doesn't give a ..." - guess who?
Bitcoin is an elaborate test. A test they are happily beginning to conclude. The exit from the dollar will begin the birth of something similar, though much bigger and 'official to what Bitcoin is today. Claims of anonymity for Bitcoin have already been shattered. This is merely a real world test.
ReplyDeleteIf you want a little more information - Digital Virtual Currencies and Bitcoin - Amazon it a little light reading from a rebels point of view and as a Dark Web financial system it works great. I also wrote a book about - The Deep Dark Web - Amazon too. Bitcoin is here to stay. The VC are calling me left and right asking questions so when the money men talk - IMHO
ReplyDeleteIs sex is a currency? It can be used to pay for goods and services when someone is willing to accept it. And it can be exchanged for money.
ReplyDelete