Michell Espinoza, a Florida resident has criminal charges against him for illegally selling Bitcoin and money laundering. He and his attorney are arguing that there are no criminal offenses because bitcoin isn’t recognized as real currency under Florida law.
Economics Professor, Charles Evans took the witness stand on Friday to help inform everyone better about what Bitcoin is. The main point of Evan’s explanation was that Bitcoin isn’t real money. No centralized government or banks back it, like the U.S does the dollar. Regulation still remains different from state to state, and in different countries as well. To top it off, he mentioned how the IRS see’s dealing with bitcoin little more than bartering.
“Basically, it’s poker chips that people are willing to buy from you,” Professor Evans stated. Ironically, Evans received $3,000 USD worth of bitcoin for appearing as a witness for the defense.
As attorney Frank Andrew Prieto held up a U.S. Quarter he said “Is bitcoin an actual coin?”
“In a sense of a physical piece of base metal? No,” Evans said.
Michell Espinoza was busted when he tried to illegally sell and launder $1,500 worth of bitcoin to undercover detectives who said they were going to buy stolen credit card numbers with the bitcoins they were purchasing. Espinoza’s attorneys, Prieto and Rene Palomino are saying the case should be thrown out because bitcoin isn’t real money under Florida law so the charges of money laundering do not apply. The judge in this case, Teresa Mary Pooler won’t decide for another couple weeks, but she was asking Evans a lot of questions, and even asked for more time to do some research of her own.
“This is the most fascinating thing I’ve heard in this courtroom in a long time,” Judge Pooler stated.
Prosecutors are under tough scrutiny in this case, under the watchful eye of tech, as well as the financial circles due to it being the first known case of someone accused of money laundering for dealing bitcoins. Due to its ever growing popularity, law enforcement are scrambling to figure out where it fits into criminal activity. They are aware however, of the fact that it is highly used in online criminal activity, such as dark net’s black markets.
The 32-year-old web designer, who called himself MichelHack online, illegally sold undercover investigators $1,500 worth of BTC, the prosecution said. He was targeted by law enforcement on LocalBitcoins.com, when they told Espinoza that they planned to use the bitcoin to buy stolen credit card data. Detectives met with Espinoza three separate times.
Along with Espinoza, Pascal Reid was arrested, and plead guilty to impersonating an unlicensed money broker and was put on probation when he agreed to work with law enforcement in Miami-Dada county and teach them about bitcoin. The only teaching Friday came from Evans though.
He told the court that since the 1990’s he has been involved with digital currencies. He runs a nonprofit organization that helps small businesses in developing countries called Conscious Entrepreneurship Foundation.
“Indeed, bitcoin use is increasing in places such as Africa, where the banking system is broken. The market for bitcoin can vary; like today; one bitcoin is worth around $470 dollars,” Evans said in court on Friday. He also compared the value of bitcoin to how the value is placed on collector cards and comics.
“You don’t buy hamburgers with comic books. You usually purchase them with cash, or in this case, bitcoins,” Prosecutor Tom Haggerty replied to Evans on Friday.