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Bitcoin Legal ‘Money’ in U.S.? One Federal Court Says Aye

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This week, the United States District Court for the Eastern District of Michigan asserted its position that bitcoin is “money” per U.S. federal law after a defendant had argued it wasn’t. The Court referred to related decisions from other district courts and the U.S. Treasury’s Finance Crimes Enforcement Network (FinCEN), which interprets virtual currencies as money and not as commodities, securities, or beyond. 

Also read: Grizzled – Welcome the Longest Bitcoin Bear Market Yet

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Bitcoin? Yeah, That’s ‘Money’ to Us Says One Federal Court

On February 1st, the Southern Division of the District Court for the Eastern District of Michigan issued an order in United States v. Stetkiw denying the defendant’s dismissal and suppression motions per the Court’s argument that bitcoin was, in fact, money.

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The case’s plaintiff, the United States, has argued Bradley A. Stetkiw ran afoul of U.S. money laundering laws in facilitating trades worth “hundreds of thousands of dollars of bitcoins” on LocalBitcoins between 2015 and 2017 without registering as a money transmitter.

Conversely, Stetkiw has argued such registration wasn’t necessary because bitcoin doesn’t meet the definition of “money” under federal statute 18 U.S.C. § 1960 because the cryptocurrency “does not issue from or enjoy the protection of any sovereign government.”

In the case’s latest development, the Eastern District rejected Stetkiw’s stance on bitcoin and has denied his latest round of related motions in pointing to FinCEN’s non-binding “Guidance” that virtual currencies can qualify as money.

Bitcoin money
Will FinCEN’s interpretation win out federally? In crypto, the CFTC sees commodities, the SEC sees securities, the IRS sees property, and FinCEN sees money. What view will eventually seize the day in the U.S.?

Arguing that such a position was valid, the Court contended the defendant was indeed an unregistered money transmitter. The Court also said its argument was bolstered by other district courts’ opinions.

“Federal District Courts have repeatedly found that Bitcoin constitutes ‘money’ and ‘funds’ within the meaning of 18 U.S.C. § 1960,” the Court said.

Zooming out, the Eastern District’s newly outlined and formal position suggests federal courts are moving toward a consensus, at least for now, that bitcoin and cryptocurrencies can clearly qualify as money.

Property, Securities, Commodities, Oh My!

The implications of United States v. Stetkiw take on added significance in the context of America’s current non-uniform federal approach to cryptocurrencies.

Indeed, the Internal Revenue Service asks taxpayers to pay up on cryptocurrencies as “property,” which brings capital gains and losses into play. The Commodities Futures Trading Commission wants to regulate crypto as “commodities,” and they’ve pointed to another recent federal ruling to back that position up.

Likewise, the current leadership at the U.S. Securities and Exchange Commission has repeatedly suggested that the cryptoeconomy is awash in unregistered securities.

Even Supreme Court Justice Stephen Breyer waded indirectly into the debate last year when he argued in a dissenting opinion that the government’s understanding of money shouldn’t “be trapped in a monetary time warp” and that employees might one day be paid their salaries in bitcoin.

What’s clear, then, is that the overall status of cryptocurrencies in the U.S. is presently unclear, insofar as there are several competing regulatory views.

Yet as more federal courts hear crypto cases and as America’s nook of the cryptoverse matures, consensus may be on the horizon.

What’s your take? Should the U.S. government uniformly consider bitcoin “money,” per the relevant federal statutes? Let us know in the comments section below. 


Images via Pixabay



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