Judge in Faiella case: "Bitcoin is money"

Reuters reports that U.S. District Judge Jed Rakoff rejected a plea by Robert Faiella, facing charges of money laundering and operating a an unlicensed money transmission business along with Charlie Shrem, that Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term should not be considered money. Faiella therefore reportedly contended that the charges of operating an unlicensed money transmission business should be dropped.

The indication is that he only asked for one of the two charges to be dropped, although one wonders why the same argument can't be made for money laundering.

Judge Rakoff rejected Faiella's claim, saying that bitcoin "clearly qualifies as 'money' or 'funds'" under dictionary definitions, a view backed by historical interpretation of the law. He wrote:

"Bitcoin can be easily purchased in Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term for ordinary currency, acts as a denominator of value, and is used to conduct financial transactions."

Faiella also claimed that his activities on Silk Road did not constitute "transmission". Rakoff rejected this argument as well, arguing that he had customer funds sent to the website and transferred to others for a profit.

The legal definition of Bitcoin as money depends on the practical application, a point that as stirred debate. FinCEN now requires businesses even transmitting solely virtual currencies to obtain a money transfer license. On the other hand, the IRS ruled that for tax purposes, Bitcoin is not money.

The latter ruling was indeed evoked by Joshua Dratel, lawyer for Silk Road operator Ross William Ulbricht. In a 64-page motion, he in fact placed the most emphasis on the non-applicability of money laundering laws to virtual currency. His arguments were also rejected.

Faiella and accused co-conspirator Charlie Shrem will face trial on September 22.