Potentially setting the standard for future cases, a New York federal judge ruled that Bitcoin is a form of legal currency.
On September 19, Judge Alison Nathan of the Southern District Court of New York likely ended the year-long Coin.mx case. Anthony Murgio, one of the Coin.mx operators, was indicted in July 2016 for working without a money transmission license. He was similarly charged with money laundering and willful failure to file suspicious activity report. Murgio’s council has been fighting to have the money laundering charges dismissed, arguing that Bitcoin is not legal currency.
Judge Nathan rejected Murgio’s bid to dismiss the money laundering charges, claiming that Bitcoin very explicitly qualifies as currency.
According to Reuters, she wrote a brief explanation regarding her decision:
Bitcoins are funds within the plain meaning of that term. Bitcoins can be accepted as a payment for goods and services or bought directly from an exchange with a bank account. They therefore function as pecuniary resources and are used as a medium of exchange and a means of payment.
She adds that her decision did not address six other criminal counts that Murgio faces.
Murgio, along with several other conspirators have been under federal investigation for criminal activity involving Bitcoin. He was accused of willingly laundering funds from bitcoin ransomware attacks and other fraud.
According to the FBI regarding Murgio’s criminal role in Coin.mx:
In doing so, Murgio, and his co-conspirators knowingly enabled the criminals responsible for those attacks to receive the proceeds of their crimes, yet, in violation of federal anti-money laundering laws, Murgio never filed any suspicious activity reports regarding any of the transactions.
Nathan’s ruling follows a recent Florida money laundering case where Judge Pooler made precisely the opposite ruling. Pooler cleared the defendant of all charges after agreeing that Bitcoin failed to meet the state criteria for currency. Interestingly, the state of Florida is not alone in having currency specifications that leave Bitcoin in a gray area. Most similar, perhaps, is the IRS defining Bitcoin as a “property” (I.R.S. Notice 2014-36).
The aforementioned Florida case has pushed states to re-examine legislation to accommodate the growing cryptocurrency usage. In one scenario, such action was taken almost immediately. After Pooler cleared Michell Espinoza of money laundering charges, the state of Florida filed an appeal to overrule her decision. The state disagrees with Pooler’s finding that Bitcoin is not a legal currency in the state of Florida.
Attorney Brian Klein, Murgio’s legal counsel, tells CoinDesk that the defense will continue to fight the charges. “The defense obviously disagrees with the Court’s denial of the motion to dismiss,” he says. Klein tells the press that Murgio looks forward to clearing his name at his upcoming court appearance.