We saw some states take initiative to become "crypto-friendly". This is the result of elected houses that were open to the idea of trying to attract businesses in the new technology. A few states either have or are close to allowing taxes to be paid in crypto. This is a huge step.
There is an interesting situation developing that could really cause waves throughout the financial stratosphere.
The issue resolves around a simple question: how can you have money laundering without money?
This is the exact issue that is going to an court of appeals. The decision that comes out will have ramifications throughout the entire state.
At the center of this is money laundering and unauthorized money transmitter charges brought against one who ran a digital-currency trading website. The case was initially dismissed by the Judge who deemed that Bitcoin did not meet the definition of money.
Thus far, the 3rd District Court put forth that while Bitcoin does not constitute money, it does act a medium of exchange and should be considered legal tender. This was the grounds the court used for retaking the original case against Michell Espinoza.
It is easy to see how there is much more at stake than one person being tried for money laundering. By taking this position, the court is establishing that Bitcoin be recognized as legal tender. This would open the door for acceptance throughout the entire state.
The case is still open without a resolution. If Espinoza is charged with the crimes, then the state has to recognize Bitcoin as legal tender.
Of course, this could be appealed all the way up to the Supreme Court but there is no guarantee they take the case. Refusal to hear the case, if it went that far, would open the door for other states to follow suit.
It certainly does create an interesting quandary. We have, I am sure, a zealous prosecutor, trying to make a name for him or herself, bringing charges. By turning the case away, the established way of doing things was protected. Now, however, with the decision being appealed to a higher court and that court deciding to take the case based upon Bitcoin being legal tender, the present system faces disruption.
This also poses a double-edged sword for cryptocurrency. By recognizing it as legal tender, all transacting entities must be licensed. This would put it back in the hands of Wall Street. Of course, decentralized exchanges are the way around this negating the need for any licensing.
One other interesting legal point could be raised regarding the Lightning Network. A case could be made that anyone handling transactions on that network in the United States would require a money transmitter license. Failure to procure one would be subject to criminal charges.
This case is worth watching.
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