Victor Ugochukwu · Dec 14, 2020 . 5min read
Bitcoin Recognized as Money Under DC Financial Laws
A federal court in Washington D.C. just ruled that Bitcoin is not exempted as money under its Financial Services Laws
By Victor Ugochukwu · Jul 25, 2020 . 6min read
A federal court in Washington D.C. just ruled that Bitcoin is not exempted as money under its Financial Services Laws Bloomberg reports. Bitcoin is recognized as money and would, therefore, be treated as such within the ambits of its laws the case shows.
This ruling came as a result of criminal charges filed against Larry Dean Harmon who operated a Darknet Bitcoin trading platform. Larry Dean Harmon had sought to dismiss the case which the prosecutor charged as an unlicensed money transmitting business under D.C. law and for laundering money under federal law.
However, the presiding Chief Judge Beryl A. Howell in his rulings said:
Money “commonly means a medium of exchange, method of payment, or store of value,” Bitcoin is these things.Chief Judge Beryl A. Howell
The D.C. Court went further by clearing any misconception as to the definition of money. It said:
The D.C. law adopts that meaning even though it doesn’t strictly define “money,”D.C. Court
Harmon operated a Darknet ring, where he allegedly advertised mask drug, gun, or other illegal transactions from law enforcement. He allegedly aided the exchange of illegal services equivalent to the tune of $311 million dollars between 2014 and 2017. Similarly, another case still in the United States was when a Darknet operator and pharmacist used Bitcoin as a money-laundering tool.
Implications of D.C. ruling
What exactly does this ruling means for anyone dealing in bitcoins in D.C. and then, of course, the broader cryptocurrency community? Subsequently, is Bitcoin now fully recognized as money everywhere now?
As Neeraj of Coincenter puts it:
This ruling couldn’t be more clearer.
In effect, how regulatory bodies define Bitcoin and other digital coins, more importantly, shape how their regulations around the world. These rules determine whether Bitcoin and others make the leap from just a niche market to a mainstream asset.
Even within the broader digital assets community and the blockchain space, cryptocurrency identity crisis appears to be prevalent. Is Bitcoin recognized as a commodity or money in the context of currencies? This pertinent question is what rulings from D.C. Court are beginning to shape.
If classified as a commodity, then we expect relatively little regulatory oversight. Yes, the Internal Revenue Service may tax it as we see the United States government apply this rule. Securities, on the other hand, are typically subject to more rigorous rules on price transparency, trade reporting and market abuse.
Commodity values can surge, although usually not like what we see with the horrific rise and fall with Bitcoin volatility.