Wednesday, June 1, 2016

Economist Argues Bitcoin Isn’t Money (In Closely Watched Court Case)

In a court proceeding watched closely in tech and financial circles across the United States and the world, an economist testified last week that bitcoin isn’t really money and thus not subject to money-laundering laws. The judge’s decision—not expected for several weeks—could have a major impact on the future of the cryptocurrency.
Charles Evans, an economics professor at Barry University in Miami, was called upon Friday to testify as an expert witness for the defense in the case of Michel Espinoza, who stands accused in Florida of laundering $1,500 in bitcoins and selling them to undercover FBI agents who claimed they would use the bitcoins to buy stolen credit card numbers. Espinoza’s legal team has sought to have the charges dismissed on the grounds that Bitcoin isn’t really money and thus the money-laundering charges against their client don’t really apply, reports the Miami Herald.
But his approach seems absurdly weak to me.
“Basically, it’s poker chips that people are willing to buy from you,” Evans told the court, saying Bitcoin is less a currency than something collectors assign value to, like baseball cards and comic books. Evans’ expert witness fee—$3,000—was paid in Bitcoin.
An Austrian economist would have testified on the nature of money and pointed out the classic view is that money is the most marketable commodity, something that almost anyone will accept in exchange and that Bitcoin isn't even close. That Bitcoin is more like a fad among some techies and some libertarians--like the tulip bulb fad.  No one took seriously that tulip bulbs were money. 
The case is being closely watched around the world because it is believed to be the first money-laundering case involving Bitcoin, and the judge’s decision regarding Evans’ testimony could offer a glimpse into how the courts will deal with Bitcoin moving forward, reports CNN.

1 comment:

  1. I suspect Espinoza would have been charged if he had bought $1500 in tulips and sold them to undercover FBI agents to buy stolen credit card numbers. Or $1500 in gold or artwork for that matter. I'm not in favor of such laws, I'm just not sure it matters whether or not the commodity Bitcoin is money in this case. The original $1500 used to buy Bitcoin was laundered.