As revealed by Stephen D Palley, a lawyer based in D.C., based on the ruling of a federal court of Michigan, stated that Bitcoin is legal money. Pallet revealed this through tweets on the 2nd of February.
U.S. District Court Ruling On Bitcoin
In a case involving a money laundering scheme that involves hundreds of thousands of dollars worth of Bitcoin traded on localbitcoin, US District Court for the Eastern District of Michigan ruled that Bitcoin is legal money. The defendant’s legal defence stated during the trial that Bitcoin does not qualify as money and thus the statutes that apply to money servicing did not apply.
In contrast to the view of the defence counsel, Palley noted in his tweet post that the court stated that by similar decisions made by other federal district courts, money laundering involving Bitcoin does not count as a violation. This is because Bitcoin qualifies as fund or money because it is something that is generally considered as a medium of exchange, a measure of value or means of payment.
While Bitcoin seems to count as money in the violation of the type noted, it does not seem to count as definition given by some other US government agencies. Some count it as a commodity, security, token among others.
The FinCEN Interpretive Guidance
The definition Bitcoin that guided the ruling of the district court is based on the FinCEN interpretive guide which is noted as not ambiguous for understandable. Financial Crimes Enforcement Network which is the wing of the United States Treasury saddled with the responsibility of enforcing various financial crimes domestically and internationally views Bitcoin as money legally.
Further, Palley stated that the involvement of the FinCEN and the Office of Foreign Assets Control (OFAC), could be prominent in the crypto space in 2019. The year 2018 witnessed the dominance of the SEC on crypto issue especially as it pertains to Bitcoin ETF exchange traded fund which is still yet to see approval. Also, OFAC is one of the more powerful US institutions that have the capacity of applying penalties, tariffs, and sanctions against entities both domestic and foreign which may become more involved in crypto as it becomes more globally accepted.
Meanwhile, though crypto has no clearly defined definition at the moment, it is taking shape gradually, with different rulings and insights into why regulation is needed, even amid the bear market.