Bitcoin ruled to be a currency by federal judge, is subject to regulation

Aug 7, 2013
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Bitcoin ruled to be a currency by federal judge, is subject to regulation

Depending on whom you are speaking to, Bitcoin is either one of the most promising money-related ventures in modern times, it's a fad prone to fizzle away, or it is a threat to all. Regardless of which side you fall on, one thing is now certain: bitcoins are a currency, and they're subject to regulation in the United States. Such was the ruling of a federal judge today.

The decision was made by Judge Amos Mazzant in a case against the Bitcoin Savings and Trust, more commonly called BTCST. The BTCST is a hedge fund based on Bitcoins, and is accused of running what amounts to a scam. The service was shut down 12 months ago, and its founder - Trendon Shavers - was charged with running a Ponzi scheme by the Securities and Exchange Commission.

The issue arose when it was claimed that the BTCST investments aren't securities because they're in the form of Bitcoin, which is not a valid currency and thus does not fall under US regulation, as well as money having never exchanged hands (due to being in Bitcoin). The SEC objected to this claim, obviously, saying that the use of notes and contracts made them securities.

Said the judge: "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."

Such a ruling comes about a month after it was announced that currency-to-Bitcoin ATMs will be rolling out to the public this quarter, allowing users to feed bills into the machine for conversion into Bitcoins. The ATM will reportedly work with well-known Mt. Gox and others, and are small enough to sit on top of a table, for example. Thus far, interested countries have included the UK, Canada, Australia, China, Israel, and more.

VIA: Ars Technica
SOURCE: US Archive


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