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Judge Shoots Down "Bitcoin Isn't Money" Argument In Silk Road Trial

samzenpus posted about 3 months ago | from the I-fought-the-law dept.

The Courts 135

An anonymous reader writes in with the latest in the case against the alleged creator of the Silk Road, Ross Ulbricht. The government and legal community may still be arguing over whether bitcoin can be defined as "money." But the judge presiding over the landmark Silk Road drug case has declared that it's at least close enough to get you locked up for money laundering. In a ruling released Wednesday, Judge Katherine Forrest denied a motion by Ross Ulbricht, the 30-year-old alleged creator of the Silk Road billion-dollar online drug bazaar, to dismiss all criminal charges against him. Those charges include narcotics trafficking conspiracy, money laundering, and hacking conspiracy charges, as well as a "continuing criminal enterprise" charge that's better known as the "kingpin" statute used to prosecute criminal gang and cartel leaders.

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Bitcoin isn't money but it's still a financial too (5, Insightful)

Anonymous Coward | about 3 months ago | (#47422885)

Really. One would have to be extremely dense, or have lived in a cave for the last 30 years to not make the connection that Bitcoin is still a financial tool. Bitcoin's primary purpose is to traffic/launder money and goods. But it's not just bitcoin, it's also all those various game time cards you can buy at 7-11.

Re:Bitcoin isn't money but it's still a financial (5, Interesting)

TeknoHog (164938) | about 3 months ago | (#47423061)

Bitcoin's primary purpose is to traffic/launder money and goods.

I was going to say something about people who are financial tools themselves...

However, I guess you're right. I want to be responsible for my money, and I want to be able to use it freely, without government snooping. If that makes me a money launderer, so be it. It's like those politically organized pirates that simply want to use a free Internet, rather than rape and pillage.

Bitcoin isn't even particularly anonymous. If you want to launder your coins, you need to trust a third party, which kind of ruins the point of a decentralized/free currency. There are much better cryptocurrencies out there for anonymous purposes.

Re:Bitcoin isn't money but it's still a financial (-1, Flamebait)

Anonymous Coward | about 3 months ago | (#47423191)

Use cash you fucking dickhead.

Re:Bitcoin isn't money but it's still a financial (2)

SuricouRaven (1897204) | about 3 months ago | (#47423221)

It's awkward to transfer electronically.

Re:Bitcoin isn't money but it's still a financial (0)

SJHillman (1966756) | about 3 months ago | (#47423305)

But what about that ATM slot on the front of my computer?

Re:Bitcoin isn't money but it's still a financial (1)

NatasRevol (731260) | about 3 months ago | (#47423609)

They're in the back, you moron.

Re:Bitcoin isn't money but it's still a financial (1)

jenningsthecat (1525947) | about 3 months ago | (#47423619)

But what about that ATM slot on the front of my computer?

Uh... I put that there. And, hey - thanks for all the money!

Re:Bitcoin isn't money but it's still a financial (0)

spikenerd (642677) | about 3 months ago | (#47424155)

When get get cash from an ATM, the bank associates your name with the unique ID on every bill. Since banks are tightly-regulated institutions, you can bet that they pass all their logs directly to "higher ups". When you buy something at a stire, at the end of the day, the first thing any retailer does is deposit all their bills in a bank, which again scans the unique numbers on every bill, and this data is probably again passes right on up to those who have an interest in tracking you. In rare cases, a bill may change hands a couple times before ending up in the hands of a retailer, but modern data mining techniques can trivially follow two or three hops, and I assure you that there is absolutely no way the NSA would simply pass up having full access to such a valuable trail of information. So, in other words, cash is no panacea of anonymity. With cash, not every transaction is logged as explicitly as with BitCoins, but at least someone has to do a little bit of work to attach your real name to your transactions.

Re:Bitcoin isn't money but it's still a financial (0)

Anonymous Coward | about 3 months ago | (#47424305)

Paranoid delusional much?

Re:Bitcoin isn't money but it's still a financial (0)

Anonymous Coward | about 3 months ago | (#47424391)

I've heard the exact same thing. The serial numbers are tracked at some level. I always assumed it was at the banks, but if it happens locally or at the central bank level I don't know.

Re:Bitcoin isn't money but it's still a financial (1)

gl4ss (559668) | about 3 months ago | (#47424437)

that would be both friggin expensive and mainly useless. usual hop is way more than 3 between bank runs..

cash works just fine. you still have to launder it to use it though so that the irs/neighbours don't bust you for having money you shouldn't have...

Re:Bitcoin isn't money but it's still a financial (1)

CheezburgerBrown . (3417019) | about 3 months ago | (#47425325)

So, pay with Quarters instead.

Re:Bitcoin isn't money but it's still a financial (4, Insightful)

Anonymous Coward | about 3 months ago | (#47423205)

If that makes me a money launderer (...)

What makes someone a money launderer is how they employ tricks to eliminate any trace between the money exchanged in an illegal transaction and how it is being officially accounted for.

In very much the same way as a specific brand of laundry detergent is used as a currency in illegal transactions [wikipedia.org] .

In the case of encryption key schemes such as bitcoin, the thing that gave it traction was how the silk road functioned through a wink and a nod, with peers agreeing that to conduct their illegal business they first exchanged their money for crypto keys, conducted the business by giving the crypto keys in exchange for illegal goods and services, and then exchanged the crypto keys for real money. The only purpose behind this scheme was to eliminate the paper trail between the money and the illegal transaction.

That's what makes it a money laundering scheme. Because its primary use is to launder money.

Re:Bitcoin isn't money but it's still a financial (1)

Anonymous Coward | about 3 months ago | (#47424137)

of course it is used for that. all new technology is embraced by the criminal element first. High risk, High reward = huge incentive to employ whatever it takes not to get caught, and make more money, coupled with tons of disposable income to spend on the newest technologies. The internet itself was a den of thieves and pornographers at first, the positive uses outweighed the negatives though .. as we can see now. Cell phones, pagers, ... GPS guided mini submarines ... all used for crime primarily from early adopters.

You know what is used for money laundering more than any other technology? The US dollar. You know who launders it? Bank of America , etc. Drug cartels, Iran , etc ... Big bangs are complicit for BILLIONS.

So what if bitcoin is in part used for laundering. It is not a money laundering scheme. Its not even a sceheme at all , it is a network. it is a protocol. how can that be a scheme? was TCP/IP a scheme?

Bitcoin is used for much more than laundering. and eventually it will primarily (if not already) be used for legitimate transactions.
I mean , heck its a better currency than most countries have right now. FOr example if you live in venezuela, and are facing 30% inflation a year watching you saving evaporate overnight ..bitcoin is looking pretty good to you right now. Especially since your government restricted transferring your money into other currencies.
Its looking pretty good for africans right now too who have been using digital currencies for years, now they can use a global digital currency instead of a localized one.

I accept bitcoin on my retail website, and I have seen about an 18% rise in sales because of it. I think this will drop a bit as competitors start to accept it as well, but I am serving an untapped market at the moment. It is being used for commerce. not just money laundering. and It will continue to shift towards more and more legitamate uses as time goes on, because it has advantages over other payment methods, and the weaknesses are being solved.

Re:Bitcoin isn't money but it's still a financial (1)

Applehu Akbar (2968043) | about 3 months ago | (#47424145)

Money laundering is any use of cash which the government deems in a particular case to be connected with a criminal enterprise. This includes simple possession of cash, independent of its use in any transaction.

Re:Bitcoin isn't money but it's still a financial (0)

Anonymous Coward | about 3 months ago | (#47424191)

You clearly don't understand Bitcoin (as your description of it so eloquently conveys) if you think its primary purpose is to launder money.

That's like saying an automobile's primary purpose is to crash into things. Surely it could be used for such a purpose, but that is obviously not its primary purpose.

You also contradicted your own argument with your wonderful reference to laundry detergent. Is laundry detergent's primary purpose laundering money?

You also seem to be insinuating the Silk Road created Bitcoin, though I really hope that's not the case.

Bitcoin is very similar to an online version of cash except there is a public record of all transactions. It's funny since cash is also used to launder money frequently. Which must be its primary purpose.

Re:Bitcoin isn't money but it's still a financial (1)

phantomfive (622387) | about 3 months ago | (#47424535)

You clearly don't understand Bitcoin (as your description of it so eloquently conveys) if you think its primary purpose is to launder money.

He didn't say that (just as the primary purpose of laundry detergent isn't to launder money, it's to wash clothes. LTR). He said the reason Silk Road used it is to launder money. There's a difference.

Re:Bitcoin isn't money but it's still a financial (-1)

Anonymous Coward | about 3 months ago | (#47423415)

I want to be responsible for my money, and I want to be able to use it freely, without government snooping.

Bullshit. You wanted to make a fast buck like everyone else... If you managed to do this, congratulations! But don't think your rhetorical nonsense is going to fool us.

Re:Bitcoin isn't money but it's still a financial (1)

bill_mcgonigle (4333) | about 3 months ago | (#47423709)

<i> I want to be responsible for my money, and I want to be able to use it freely, without government snooping.</i>

Use cash - it's like bitcoin but it can't be tracked across the Internet.

Of course, if you take cash from some people and then give it to other people, well then you must be a criminal.

Re:Bitcoin isn't money but it's still a financial (2)

westlake (615356) | about 3 months ago | (#47424013)

Of course, if you take cash from some people and then give it to other people, well then you must be a criminal.

If you know where you stand as middle man in a criminal transaction - such as a money laundering scheme - you most certainly are a criminal yourself.

Re:Bitcoin isn't money but it's still a financial (1)

RyuuzakiTetsuya (195424) | about 3 months ago | (#47424045)

also if you're pulling out tens of thousands of dollars of cash out of the bank, that gets flagged as suspicious. or cashing extremely large checks. or doing business in straight cash transactions for large(ish, relative to individual use) sums...

Re:Bitcoin isn't money but it's still a financial (1)

mlw4428 (1029576) | about 3 months ago | (#47424619)

God, then pay cash. You act as if YOUR legal financial dealings are important. Unless you're buying anthrax, massive amounts of coke, or guns with serial numbers filed off than chances are your dealings are about as interesting to the government as my pissing schedule is to you.

Re:Bitcoin isn't money but it's still a financial (0)

Anonymous Coward | about 3 months ago | (#47425001)

If you want to launder your coins, you need to trust a third party, which kind of ruins the point of a decentralized/free currency.

CoinJoin

Re:Bitcoin isn't money but it's still a financial (-1)

Anonymous Coward | about 3 months ago | (#47423131)

Bitcoin's primary purpose is to traffic/launder money and goods.

Something else called cash money that has done the same thing very effectively for a couple hundred years (still does). Does the cash have your name, last possible address, and picture on it? Not the last time I checked. AKA it is as anonymous (supposedly) as Bitcoin.

What planet do you live on? Did Silk Road kill thousands? Did they sell how to books on mass murdering as many people in a mall/school? This fuck*** country was founded on dirty money and continues to this day. This is a massive waste of tax dollars, a person hosted a web site, by their logic they should go out and shoot or sue the companies that make guns. That is what this amounts too.... You make guns knowing why you make them, to kill. If you host any site and something illegal takes place you can be held accountable.

This is what cracks me up about this country, it was okay for coke/heroin kingpins to buy off politicians, gun makers, and other monopolistic corporations that are just as evil, but lets go after anyone the idiot Federal Prosecutors decide screwed them over because they didn't pay taxes or didnt buy them off.

Not yelling at you, just the stupidity of the feds, and brainless judges...

Re:Bitcoin isn't money but it's still a financial (1)

Lord Lemur (993283) | about 3 months ago | (#47423493)

Come on, it was constructed for the purpose of exchanging illegal goods and services.

Re:Bitcoin isn't money but it's still a financial (1)

NatasRevol (731260) | about 3 months ago | (#47423621)

illegal/anonymous/no difference

Re:Bitcoin isn't money but it's still a financial (1)

Lightning McQueen (3342905) | about 3 months ago | (#47424333)

"a person hosted a website." The guy was hiring hit men and actively involved in the drug trade.

Re:Bitcoin isn't money but it's still a financial (1)

JumperCable (673155) | about 3 months ago | (#47423369)

Then why do they call Bitcoin an electronic currency? Heck, even the name contains the word "coin." You can't have it one way when facing a judge for a certain lawsuit, and then switch it to something else when a different lawsuit or legislation rears it's head.

Do you know what else is a "financial tool?" The dollar. It can be used to traffic/launder money & goods too.

Re:Bitcoin isn't money but it's still a financial (1)

Sloppy (14984) | about 3 months ago | (#47424471)

Bitcoin's primary purpose is to traffic/launder money and goods.

Objection. Will stipulate that its primary purpose is to traffic. But I call mega-bullshit on its primary or even secondary purpose being to launder, though there might be a way one could use Bitcoin for that.

Miracle on 34th street.... (2, Interesting)

Anonymous Coward | about 3 months ago | (#47422907)

The judge dismisses the 'bitcoin is not money' portion based of a ruling that the IRS and Fed Reserve do not have the authority to define what 'money' is. (both having defined bitcoin as 'property' and not 'money') Which is all fine and good, but the US Marshal has already ruled bitcoin as property since they disposed of the seized bitcoin through a property sale. There are very particular and different rules governing the disposal of money and property. One would think the US Marshals office actions would be the statute defining action.

Re:Miracle on 34th street.... (2)

Barny (103770) | about 3 months ago | (#47422999)

There you go assuming again. Assuming that this was ever going to be about bitcoin != money.

You know what they say about assuming. It makes an ass of you and ming. Poor ming.

Re:Miracle on 34th street.... (0)

Anonymous Coward | about 3 months ago | (#47423485)

Poor Ming...
Never heard that one before... Bravo sir; you made me giggle today!

Re:Miracle on 34th street.... (1)

CheezburgerBrown . (3417019) | about 3 months ago | (#47425291)

heh, poor ming.

Re:Miracle on 34th street.... (5, Insightful)

Gravis Zero (934156) | about 3 months ago | (#47423109)

The judge dismisses the 'bitcoin is not money' portion based of a ruling that the IRS and Fed Reserve do not have the authority to define what 'money' is. (both having defined bitcoin as 'property' and not 'money') Which is all fine and good, but the US Marshal has already ruled bitcoin as property since they disposed of the seized bitcoin through a property sale. There are very particular and different rules governing the disposal of money and property. One would think the US Marshals office actions would be the statute defining action.

do you really think the US government wont have it both ways? i'm reminded of this story: "US government declares hacking an act of war, then hacks allies" [washingtonexaminer.com]

if I've learned anything in my life, it's that laws, logic and common sense dont really matter to the government or big business... unless it's convenient.

Start drug related business!!! (0)

Anonymous Coward | about 3 months ago | (#47422917)

Step 1 Start drug related business!
Step 2 Profit!
Step 3 Go to jail!

Optional Step Avoid prison rape!

Re:Start drug related business!!! (-1)

Anonymous Coward | about 3 months ago | (#47422955)

Rape joke are never funny. [facebook.com]

~SJW

Re:Start drug related business!!! (1, Funny)

qbast (1265706) | about 3 months ago | (#47423085)

Oh stfu you damn PC drone.

Re:Start drug related business!!! (-1)

Anonymous Coward | about 3 months ago | (#47423285)

Oh stfu you damn PC drone.

If you have the courage to say the same to a crying women then your next assignment will be to find some crying bitch and slap some sense into her.

Else then you are just a other 'tough guy' over the intertubes. Be proud. Fight PC bullshit. Slap women in the face.

Re:Start drug related business!!! (1)

CheezburgerBrown . (3417019) | about 3 months ago | (#47425309)

Implying Men cannot be the victim of rape?

You make me sick.

Re:Start drug related business!!! (0)

Anonymous Coward | about 3 months ago | (#47424223)

cry moar faggot

Not all money is legal tender (0)

Anonymous Coward | about 3 months ago | (#47422961)

Monopoly money is also money. But it is not legal tender. But then again, if a judge says so...

Bitcoin ISN'T Monay (-1)

Anonymous Coward | about 3 months ago | (#47423009)

The Constitution and the Laws of the United States say it isn't money. The Constitution and the Laws of the United States say that only Congress can make money, and therefore only what Congress makes is money.

This judge is trying to argue and establish that anything having perceived value is money. And, indeed, that is the way the IRS sees it, too.

Re:Bitcoin ISN'T Monay (3, Insightful)

thaylin (555395) | about 3 months ago | (#47423057)

So Russians money is not money? No other country has money because congress is the only people that can make money? Of course the contitution does NOT say that only congress has that ability, just that they are able to coin money.

Article 1, section 8 .... To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures; ....

Now if you can tell me where in that line it says that ONLY congress is able to make money I will bow down to your constitutional knowledge.

Re: Bitcoin ISN'T Monay (3, Funny)

Entrope (68843) | about 3 months ago | (#47423099)

It's called the Dormant Minting Clause. But you probably haven't heard of it...

Re: Bitcoin ISN'T Monay (2)

thaylin (555395) | about 3 months ago | (#47423233)

Because it does not exists... There is a Dormant Commerce Clause, but no Minting Clause..

Re: Bitcoin ISN'T Monay (1)

Entrope (68843) | about 3 months ago | (#47423315)

It's called humor, but you're apparently too square to have heard of that either.

Re: Bitcoin ISN'T Monay (1)

thaylin (555395) | about 3 months ago | (#47423395)

As you know, it is hard to tell if someone is being sincere or in jest on the internet so people generally do things to give hints, which you did not..

Re: Bitcoin ISN'T Monay (1)

geekoid (135745) | about 3 months ago | (#47423981)

I am a fan of putting a tilda after non serious comment, but it was a pretty obvious joke.

Re: Bitcoin ISN'T Monay (1)

SpankiMonki (3493987) | about 3 months ago | (#47423351)

It's called the Dormant Mining Clause. But you probably haven't heard of it...

FTFY

Article 1 Section 10 (1)

westlake (615356) | about 3 months ago | (#47424457)

Now if you can tell me where in that line it says that ONLY congress is able to make money I will bow down to your constitutional knowledge.

Fair enough.

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

You can. of course, use foreign currencies to make ordinary purchases in the US, but no one is obliged to accept them, and you will likely be surcharged over and above the exchange rate posted at a bank.

Re:Bitcoin ISN'T Monay (4, Informative)

alexander_686 (957440) | about 3 months ago | (#47423149)

The Constitution does not say this. It states that the Federal Goverment can issue and regulate money but not that it has a moneopoly. In fact, for the majority of US history private money was very common. i.e. Bank notes issued by private banks. It was not until the Civil War that goverment money was common and IIRC not until the early 1900 when private bank notes becaome uncommon.

Re:Bitcoin ISN'T Monay (1)

CrimsonAvenger (580665) | about 3 months ago | (#47423683)

IIRC not until the early 1900 when private bank notes becaome uncommon.

The Federal Reserve was created in 1913. After that, privately issued Bank Notes pretty much vanished.

When Banks Were Able to Print Their Own Money (1)

westlake (615356) | about 3 months ago | (#47424697)

The Constitution does not say this. It states that the Federal Goverment can issue and regulate money but not that it has a moneopoly. In fact, for the majority of US history private money was very common. i.e. Bank notes issued by private banks.

with predictably disastrous results:

There were significant problems with this system, in which money often wasn't worth the paper it was printed on. In theory, a bank note derived its value from its ability to be redeemed for gold or silver at the issuing bank, but what banks could live up to that promise? Those that were poorly capitalized went to great lengths to ensure that their notes weren't redeemed. For example, the Union Bank of Tennessee issued notes only redeemable in New Orleans.

In this unpredictable environment, spending a dollar required some serious thinking. A wallet might have three, five or a dozen different bank notes -- a bull's head staring back at you from a Bull's Head Bank note, or a Marine Bank bill illustrated with ships -- not to mention foreign coins from around the world and personal checks, which also circulated as money. Most bank notes traded at a discount based on the reputation of the bank and how far the note was from where it originated.

A shop owner had even more variables to consider. When a consumer opened his wallet to pay, the proprietor turned to his local edition of ''Bicknellâ(TM)s Counterfeit Detector and Bank Note Reporter,'' or to ''Van Court's Counterfeit Detector and Bank Note List.''

Thumbing through a counterfeit detector, the store owner would try to assess the value of the bank notes at hand. He took a hard look at the person handing over the bills, judging value based on the person's race, class, dress, comportment and reputation.

Counterfeiters exploited this feature of the system, and passed themselves in addition to their notes, dressing and acting as proper ladies and gentlemen. And with so many bank notes from so many banks, counterfeiters flourished. Some simply invented whole banks. Others erased the name of a failed bank and replaced it with that of a reputable one.

Of course, as 19th-century observers frequently noted, a poorly capitalized bank that printed notes it couldn't redeem was, in the end, little different from a counterfeiting operation.

When Banks Were Able to Print Their Own Money, Literally [bloombergview.com]

Re:When Banks Were Able to Print Their Own Money (1)

fredprado (2569351) | about 3 months ago | (#47425055)

f course, as 19th-century observers frequently noted, a poorly capitalized bank that printed notes it couldn't redeem was, in the end, little different from a counterfeiting operation.

As is any government that prints too much money and causes inflation.

Re:Bitcoin ISN'T Monay (1)

Bill_the_Engineer (772575) | about 3 months ago | (#47423349)

I think you meant to say is "Bitcoin ISN'T US Currency". It still has value and used in the trade of goods and commodities. It is a local currency (aka community currency).

Re:Bitcoin ISN'T Monay (1)

Cajun Hell (725246) | about 3 months ago | (#47424887)

The Constitution and the Laws of the United States say it isn't money.

Wrong tool for the job. If you want to know what money is, look for dictionaries, not laws.

I suggest when you evaluate your "what is money?" answerering-tool, that you at least test it with some easy cases. Try running "Are Euros money?" through it, for example. Try giving it some story problems and see what happens:

A US citizen in El Paso Texas has as US five dollar bill and a Canadian five dollar bill in his possession, and he briefly presses them both against consecrated ground at a protestant church there, and then puts them in his wallet. He drives to Mexico City, where he meets a Japanese citizen and hands her both fivers in exchange for sexual services which are described in more detail in a different story problem. The Japanese citizen touches the Canadian five (but not the US one) to consecrated ground at a Catholic church in Mexico City, then flies to Montreal Quebec, where she pulls out the Canadian bill and offers it as a bribe to a Mounty where it is seen by this government representative but politely refused and never touched by this government worker. (Actually it only appears to be a polite refusal from her PoV. The mounty refused the bribe because she spoke in English but he was pretending to only understand French. He was attempting a rude refusal and from his PoV he succeeded.) She takes a bus through the State of New York for a while and then ends up at the Lincoln Memorial in DC. She folds the US five dollar bill into an airplane and throws it, and it glides for 2.3 seconds before landing on the ground, making contact with the earth for the first time since it left El Paso. The Canadian bill remains in her wallet, still having last touched ground in Mexico City. At any point during this course of events, did either bill's state of 'moneyness' change?

At least shake the trivial bugs out and see if your system gets confused by irrelevancies.

What about the bankers? (4, Insightful)

Required Snark (1702878) | about 3 months ago | (#47423025)

a "continuing criminal enterprise" charge that's better known as the "kingpin" statute used to prosecute criminal gang and cartel leaders.

Given the billion's of $US that various [newsweek.com] banks [wsj.com] have been fined recently, for things like evading US taxes and money laundering for Syria, Iraq, and Somalia, isn't it about time that the legal system give the same treatment to bankers committing these crimes?

Why do they get to pay fines that don't have any real effect? Just look how their stock always go up after they announce a deal. If any individual ever gets fired it's always the low level person who takes the hit, and they all end up going to work for someone else and never face any real problems.

Oh, I just remembered: bribes/campaign contributions along with the revolving door and juicy high paying jobs for former regulators. To bad drug dealers can't have a revolving door with law enforcement.

Re:What about the bankers? (4, Interesting)

Lumpy (12016) | about 3 months ago | (#47423043)

Actually most of America would applaud the SWAT team entering banks with shotguns and tasers.

Listening to an investment banker on the floor screaming "dont taze me bro" would pretty much make every single person on the planet smile at the same time. It would cause world peace and make cold fusion work.

Re:What about the bankers? (1)

gstoddart (321705) | about 3 months ago | (#47423455)

Listening to an investment banker on the floor screaming "dont taze me bro" would pretty much make every single person on the planet smile at the same time. It would cause world peace and make cold fusion work.

Sounds like an awesome idea for a Kick Starter campaign.

Surely it would do almost as well as potato salad. [gizmodo.com]

Doing the same to the people in charge of the NSA would also be awesome.

Re:What about the bankers? (1)

PPH (736903) | about 3 months ago | (#47424453)

Actually most of America would applaud the SWAT team entering banks with shotguns and tasers.

Only if I can get there and withdraw my savings first.

All of you haters underestimate the extent to which our economy depends on the unimpeded flow of capital and assets facilitated by these legal loopholes. Plug them and 1929 and 2008 will look like good times by comparison.

What I object to is the two tiered system that results from this. Any one of us plebes tries to move more than $10K across a border without doing the paperwork and its off to the rebar Hilton. A company moves assets worth billions from a high to low tax rate regime and nobody notices. Its not that I think the latter is evil. I just want the ability to participate as well. Equal protection under the law and all that.

Perspective (1)

StripedCow (776465) | about 3 months ago | (#47423097)

Judge Shoots Down "Bitcoin Isn't Money" Argument In Silk Road Trial

The argument may still be valid in a Vulcan court, though.

FUCK BETA (-1)

Anonymous Coward | about 3 months ago | (#47423135)

FUCK BETA

Seems a weak argument (3, Interesting)

Deagol (323173) | about 3 months ago | (#47423137)

Since we are supposed to report the value of barter transactions to the IRS at tax time, I don't think one (in the US, anyway) can ever argue in court that something used as a proxy for value cannot be treated as "money".

FUCK BETA (-1)

Anonymous Coward | about 3 months ago | (#47423141)

FUCK IT HARD GOD DAMNIT!

FUCK BETA (-1)

Anonymous Coward | about 3 months ago | (#47423147)

FUCK BETA WITH A BIG FUCKING FUCK STICK FROM THE FUCKING FUCK TREE YOU FUCK TARDS

fuck fuck fuck fuck fuck not in caps

Your fucking mom is an awful long string of letters
who gives a fuck
I'm part of the community
the community is what made this god damn site
quit trying to fuck shit up
quit moving the fucking god damn cheese
classic loads fine on my mobile and my desktop
leave fucking fuck shit alone for fucks sake

Moron Judge (1, Interesting)

nurb432 (527695) | about 3 months ago | (#47423155)

Its not *money*, its just simple bartering. in this case for objects that people agree on is valuable ( like pez dispensers, game tokens, or Gold Pressed Latinum ) Now, can trading in illegal/stolen items get you put in jail, sure. But its not *money* laundering. ( i think the correct term in most areas would be 'criminal conversion' )

Much like 'piracy is theft', while it may be illegal to do so, its still not *theft* because the term is used.

This perversion of terms and concepts is dangerous. It only leads to more loosely defined terms of illegality and more people subject to the governments wrath.

Re:Moron Judge (1)

Anonymous Coward | about 3 months ago | (#47423263)

When it suits their interests, its money. when it doesnt - its not money. Yay for multiple meanings depending on what I want. Slavery is Freedom.

Re:Moron Judge (4, Informative)

JBMcB (73720) | about 3 months ago | (#47423303)

Money is anything that can be used to store or trade value. Anything *can* be money, but that doesn't mean it is.

If people are buying bitcoin, then trading it for goods, services, or other forms of money, then, de-facto, it's money.

Re:Moron Judge (2)

StikyPad (445176) | about 3 months ago | (#47424071)

Except the IRS has declared that bitcoin is property, not currency.

Q-1: How is virtual currency treated for federal tax purposes?
A-1: For federal tax purposes, virtual currency is treated as property. General tax
principles applicable to property transactions apply to transactions using virtual
currency.

and

http://www.irs.gov/uac/Newsroo... [irs.gov]

The money laundering statute applies to the below:

(4) the term âoefinancial transactionâ means
(A) a transaction which in any way or degree affects interstate or foreign commerce involving
(i) the movement of funds by wire or other means or
(ii) one or more monetary instruments, or
(iii) the transfer of title to any real property, vehicle, vessel, or aircraft, or
(B) a transaction involving the use of a financial institution...
http://www.law.cornell.edu/usc... [cornell.edu]

Note that "real property," is real estate, not any personal property whatsoever, and the term "monetary instrument" is likewise defined by the FDIC:

Monetary instruments.
(1) Monetary instruments include:
(i) Currency;
(ii) Traveler's checks in any form;
(iii) All negotiable instruments (including personal checks, business checks, official bank checks, cashier's checks, third-party checks, promissory notes (as that term is defined in the Uniform Commercial Code), and money orders) that are either in bearer form, endorsed without restriction, made out to a fictitious payee (for the purposes of Sec. 1010.340), or otherwise in such form that title thereto passes upon delivery;
(iv) Incomplete instruments (including personal checks, business checks, official bank checks, cashier's checks, third-party checks, promissory notes (as that term is defined in the Uniform Commercial Code), and money orders) signed but with the payee's name omitted; and
(v) Securities or stock in bearer form or otherwise in such form that title thereto passes upon delivery.
http://www.fdic.gov/regulation... [fdic.gov]

So yes, there are very different regulations depending on whether bitcoin is or is not currency. Absent legislation specifically addressing "virtual currency," the courts will have to hash out this disagreement, which is what will happen here, I'm sure, but I think it's regrettable that someone can be punished for law that isn't yet decided. If I drive 55, should I be punished for skirting speeding laws? Are racetracks circumventing legislation against street racing? The problem with calling this money laundering isn't that this guy is punished (if he's guilty of running the Silk Road); it's that it opens up a whole other class of individuals for prosecution just because they were using bitcoin to conduct transactions -- namely everyone who conducts transactions in bitcoin.

Re:Moron Judge (1)

jklovanc (1603149) | about 3 months ago | (#47424987)

Your first quote blows your whole argument out of the water.

Except the IRS has declared that bitcoin is property, not currency.

Q-1: How is virtual currency treated for federal tax purposes?
A-1: For federal tax purposes, virtual currency is treated as property. General tax
principles applicable to property transactions apply to transactions using virtual
currency.

Lets break down the answer

For federal tax purposes,

This clause limits the scope of the statement. It specifically states that is applies only to federal tax purposes. Since money laundering statutes have nothing to do with federal taxes the rest of the statement does not apply to money laundering statutes.

virtual currency

They use the term "virtual currency" and not a phrase like "items known as virtual currency" which is evidence that the IRS thinks Bitcoin is currency.

is treated as property

Notice they say "is treated as" and not "is". One can treat anything as anything else but that does not change what the thing actually is. For example "the man is treated as a dog". Does the man change shape and turn into a dog? No. All that statement refers to is how the man is treated not what the man is.

Taken together the IRS statement does not declare Bitcoin property as it relates to money laundering statutes. It, in fact, gives credence to the idea that the IRS thinks that Bitcoin is a currency but decided to treat them as property anyway.

Re:Moron Judge (0)

Anonymous Coward | about 3 months ago | (#47424269)

No it isn't.

Money is a medium of exchange (what you said) and account (you need to be able keep your books in bitcoins like you wold in dollars).

Butcoin was supposed to be money, but so far it's far to volatile to be used as a unit of account in any serious sense.

Re:Moron Judge (2)

JBMcB (73720) | about 3 months ago | (#47424711)

Butcoin was supposed to be money, but so far it's far to volatile to be used as a unit of account in any serious sense.

Using it as a a unit of account is a regulatory definition, not an economic one. Money is still money even if there is no concept of "Bookkeeping."

Volatility doesn't enter in to the equation, during the Weimar republic the Mark was still the currency of Germany, even though hyperinflation made it essentially worthless. Just because it isn't a good store of value doesn't mean it isn't a store of value. What matters is it's ultimate utility to the users.

Re:Moron Judge (1)

PPH (736903) | about 3 months ago | (#47424279)

De-facto money, yes. But money for the purposes of FINCEN [fincen.gov] and IRS regulations?

Money and 'property' are subject to different federal regulations. So if Bitcoin is considered money, then a whole bunch of addtional reporting requirements and controls apply to it.

Re:Moron Judge (5, Insightful)

pjt33 (739471) | about 3 months ago | (#47423341)

But he's not charged with money laundering. He's charged with conspiracy to launder money. If dirty money comes in and clean money comes out then money laundering has occurred, whether or not some of the intermediate steps involved the exchange of non-monetary assets. So "I was only involved in transactions involving the exchange of non-monetary assets" is irrelevant: what matters is a) whether they were part of a larger chain of transactions to launder money; b) whether he was aware of that larger chain.

Re:Moron Judge (1)

Archangel Michael (180766) | about 3 months ago | (#47423835)

The problem is, it is going to be really hard for the Government to trace money laundering with Bitcoin, if the people take a few simple steps.

1) Use unique wallet for each transaction
2) Use a washing service every time one acquires new coins in a normal transaction.
3) ???
4) Profit

The government is going to try to regulate "coin washing", but since it is a decentralized currency, with no government boarders, it is going to be really hard to pull off well.

Re:Moron Judge (0)

Anonymous Coward | about 3 months ago | (#47424111)

> If dirty money comes in and clean money comes out then money laundering has occurred

For example when the U.S. government seized 30,000 dirty bitcoins from Silk Road, and then sold them as 'legit' bitcoins, freshly laundered by the FBI.

Re:Moron Judge (1)

Anonymous Coward | about 3 months ago | (#47423347)

It is money. Unlike Gold Pressed Latinum or pez dispensers, bitcoin has no manifestation or function other than to be converted into currency.

Perverting common sense is dangerous, it only leads to people feeling they are the target of a conspiracy.

Re:Moron Judge (2)

wonkey_monkey (2592601) | about 3 months ago | (#47423357)

Its not *money*, its just simple bartering. in this case for objects that people agree on is valuable ( like pez dispensers, game tokens, or Gold Pressed Latinum...

...or little rectangles of paper with intricate designs in green ink printed all over them...

Re:Moron Judge (2)

StikyPad (445176) | about 3 months ago | (#47424125)

Fortunately we have laws that define those pieces of paper as legal tender, which differentiates them from little bits of hash solutions and things that people define in internet forums.

Re:Moron Judge (1)

Mister Transistor (259842) | about 3 months ago | (#47424257)

You're talking about Acid, right?

People exchange that for goods and services all the time, and it's always valuable!

Re:Moron Judge (1)

CaptainDork (3678879) | about 3 months ago | (#47423533)

The instant Bitcoin was converted to ANY form of money, it became money; subjected to the same audit trail, regulation, forensics, and transparency as money.

That alone is the show stopper for Bitcoin.

Re:Moron Judge (1)

Archangel Michael (180766) | about 3 months ago | (#47423923)

No, that is not a show stopper for Bitcoin. It is what is going to drive Bitcoin to full currency status faster, where people trade money for the more usable Bitcoin.

Here is the issue, anything that makes something less utilitarian and causes restrictions will fall into disfavor eventually. Laws and Restrictions and fees and taxes all have the unintended consequence of driving economy deeper under the table. There is a whole class of people who now work off the books, bartering and trading and whatnot, and they don't pay taxes on anything they earn, simply because the government cannot track their activities. They work very hard at staying under the radar, dealing in CASH and trades, and as a result, have a better income than someone that is legitimate.

If I earn 2000 under the table, it is worth 3000-4000 in legitimate earnings that people pay taxes on. And as more people realize how much the government seizes in taxes, even on the "poor", this will start happening more and more. Bitcoin(and similar), has the ability to really change this equation faster than it is happening now.

The more they squeeze their fists, the more people will slip through their fingers (paraphrase of Princes Leia)

Re:Moron Judge (1)

PPH (736903) | about 3 months ago | (#47424351)

Now, replace the term 'Bitcoin' in that sentence with 'unregistered securities'. Then ask Wall Street's dark markets, the banking and investment community what their opinion is on that and they will 1) shit themselves, and 2) run to Congress for an exemption to monetary reporting regulations.

Moron Judge (0)

Anonymous Coward | about 3 months ago | (#47424163)

It is absolutely money.
Actually It is a network, comprised of a protocol, infrastructure, and money.
It is a self propelling network, that creates through its very existence and operation, the very money that incentivises its continued existence and expansion.
Quite interesting really. People have had a hard time defining what it is because it is not just one thing, it is a new concept really. but part of it IS money!

But bitcoin is money, it is a store of value that can be transferred as a payment to other parties. It is money.
It is not trade or barter, you are not trading a potato for a carrot, it does not have value to the end user other than as a store of value to be used as payment for goods or services, or a store of wealth. Therefore it is money.

FUCK BETA (-1)

Anonymous Coward | about 3 months ago | (#47423165)

FUCK!!!!!11111111111111
BETA!111111

I repeat
FUCK!!!111111
BETA!!!!1111111

and once again not in caps
fuck
beta

beta is the fuxorz and exclamations points arent junk characters
beta is fucking junk
there is no need for beta
there is a need for punctuation... like fucking fucking fucking exclamation marks

FUCK BETA (-1)

Anonymous Coward | about 3 months ago | (#47423181)

Give me an F
Give me a U
Give me a C
Give me a K

What does it spell FUCK
Who do we fuck?
BETA!
Who does Dice fuck?
slashdot users!

another bs summary on slashdot (4, Insightful)

bloodhawk (813939) | about 3 months ago | (#47423261)

Seriously is it that hard to keep the utter bullshit out of the summary. The ruling made no such suggestion that bitcoin was money or close enough. She ruled you can convert bitcoin to money, the same way you can convert a bag of cow shit. In other words she ruled that bartering goods doesn't get around money laundering rules as the goods have value.

Re:another bs summary on slashdot (1)

bluefoxlucid (723572) | about 3 months ago | (#47423465)

I would have ruled that money laundering laws are stupid and should be thrown out! There are a lot of other shits we could charge this guy with. For example: Continuing criminal enterprise.

Re:another bs summary on slashdot (1)

EuclideanSilence (1968630) | about 3 months ago | (#47425403)

Charging someone with being a criminal makes almost as much sense as charging someone with being a terrorist.

nice article (-1, Offtopic)

BoomBeachHacktool (3740929) | about 3 months ago | (#47423379)

Nice article a lot of interesting information!

wave-particle... (1)

johnsnails (1715452) | about 3 months ago | (#47423507)

Sort of like the wave-particle duality

This is real money (as in dollars) laundering (1)

GuB-42 (2483988) | about 3 months ago | (#47423707)

These bitcoins probably weren't intended to stay as bitcoins forever.
The flow probably looks like this : buyer uses USD to buy BTC, buyer transfers BTC to seller, seller sells BTC to get USD. That's pretty much the definition of money laundering.

Re:This is real money (as in dollars) laundering (4, Informative)

Archangel Michael (180766) | about 3 months ago | (#47424173)

That is not how money laundering looks like. Here is what Money Laundering Looks like

Illegal gained money is given to a Legitmate enterprise (Gambling) and is returned as "profit" or whatever from the enterprise. In a very simple case, mob money is put into a slot machine, and 98% of it is returned when the jackpot is hit. The gains, now washed (legitimate) are taxed and are clean for use elsewhere (deposit into a bank). Where if you just stuck the gains in the bank would trigger all sorts of investigations. This is part of the reason why deposits of $10,000 or more in banks are automatically reported to treasury, for an audit of the money trail.

The trick in money laundering is to hide the input (initial gains being laundered) well enough that it doesn't trigger the reporting requirement of transactions of 10K or more. A series of 5000 "high risk" transactions where you lose most of the time, but win big occasionally, is typically how money is laundered. The inputs are not traceable, and the earnings become legitimate.

The goal is always to hide the initial input, obfuscate the long trail of transactions and end up with legitimate money on the back end. The transaction you describe is used to obfuscate the buyer and seller from each other, and the authorities, not the transaction. Money laundering still has to occur with the seller, as the bitcoin to currency exchange still has dirty money written all over it.

This is so bizarre (0)

Anonymous Coward | about 3 months ago | (#47424501)

I went to college with Ross (UTD was a special place).

I never knew him personally, but we have several mutual friends. When he was arrested, my Facebook was flooded with tons of posts asking WTF happened. I search his Facebook profile, and we have so many friends listed in common.

I think Ross is the closest I've come to knowing a celebrity.

Auction money?! (1)

Yakasha (42321) | about 3 months ago | (#47424631)

When was the last time the government auctioned off seized money?
Wouldn't they just add it to their accounts instead?

But instead they auctioned bitcoins, as an object. Now they claim they're money. All in the same case.

Re:Auction money?! (1)

Registered Coward v2 (447531) | about 3 months ago | (#47424787)

When was the last time the government auctioned off seized money? Wouldn't they just add it to their accounts instead?

But instead they auctioned bitcoins, as an object. Now they claim they're money. All in the same case.

Everyone focuses on the money aspect but in actually the ruling focuses on the transfer of funds, and funds is a broad concept per the ruling. What I find ironic is the judge referred to online references to using Bitcoin as currency to refute the defense's claims.

Finally, the feds routinely auction of seized currency when the collectors value is greater than the face value. In Bitcoins case, auctioning them was simpler than attempting to convert them over time and possibly drive the market price down significantly.

Re:Auction money?! (1)

jklovanc (1603149) | about 3 months ago | (#47425185)

The problem is that the government can not walk up to the banks they deal with and deposit Bitcoins. Some banks to not accept some currencies but that does not invalidate the fact that it is still a currency. Try to go to a local bank and deposit foreign currency. You will notice that the bank will convert the foreign currency to local currency and deposit the local currency. Most banks do not have a conversion process from Bitcoin to local currency therefore one can not directly deposit Bitcoins. All the government is doing by auctioning off the Bitcoin currency is converting it into a currency their banks can handle.

Bitcoin is sometimes money (1)

tompaulco (629533) | about 3 months ago | (#47424841)

Bitcoin is money when the government wants it to be so they can take it from you or accuse you of money laundering. Bitcoin is not money when the government doesn't want it to be such as if you want to use it to pay taxes.

you can steal 'not-money' (1)

globaljustin (574257) | about 3 months ago | (#47425061)

article headline is stupid...

ruling that something can be stolen does not prove it is "money"

anything of value that can be owned can be stolen (in monetary terms)

"money" is a dumb word to use as a milestone

BTC's problem is that it is not accepted as payment for things like taxes, mortgage payments, car payments...it's not accepted currency....it's a hobby currency

when you can pay your mortgage or taxes with BTC then it is "money"

It is more akin to property, not to money... (2)

barfy (256323) | about 3 months ago | (#47425073)

"Money's" history has largely been one of property. It was gold, it was silver, it was in general immutable, you could warp it, stamp it, it was inherently worth whatever it was. The mark of the coin, provided sovereign trust that the "money" was the quantity and purity that you would expect.

This moved largely to a representation of something of value. Which would work so long as the banker or sovereign would create the right quantity of representation. This resulted in bubbles and bank runs when it wasn't done right. But it was essentiality tied to this immutable stuff. A gold standard. This has historically always failed...

Today money is the creation of debt. The commodity becomes the work that is created in society, and that debt is paid in money. Which then is used to create economy. This separates money from property, and it becomes more responsible for simply economy, the swirl of debt. The big key is that bankers and politicians are kept separate. The bankers attempt to keep it right as that is where the long term value is for them, and if they get it wrong, if it falls apart, the bankers have essentially nothing, and nothing is happening. The politicians through the power of central power get to impose a very special attribute to money. It can, and has to be accepted, for all debts public and private. This is a very important distinction that separates modern money from property based money. The value store in property based money is intrinsic. The value store in modern money becomes a balance of supply to work or debt. One of the big problems of this is when pooling becomes supra-economic and becomes a source of political power. This was severely limited before, it was extremely difficult for an individual to become this rich. It is much easier in this system. As it happens the economically powerful persuade for themselves to pool more of the wealth so that they have more power. Interestingly enough, this helps prevent inflation, and maybe actually keep the economy running, but it skews political power. This was supposed to be solved by confiscatory means of the government which then simply destroys the money as a fulfillment of self debt. But, this is precisely what the eco-political class works to overcome.

Bitcoin, is more akin to commodity. It has no special governmental blessing, protection, or edict. It can't be forced to be used for paying of debt. However, the value of it isn't intrinsic, for it isn't a thing. It is attributes of a thing. It is a tulip bulb. This allows for specialized movement and tracking, but it really isn't money. However, if wealth is created in the process, then it looks like money for a wealth tracking agency of a government, and it looks like wealth when converted back into money, no matter how many steps. If the process of conversion from money, into assets or economy, and then back into money for the purpose of obscuring the source and path of the original money, THAT is money laundering. And if the scheme tends to have that as an inherent purpose, the scheme itself can be declared illegal. This has happened a lot with insurance, banking, strip clubs, car washes. You see a ton of it sensationalized in the Sopranos. A very important place where this has been enforced, but received a lot of different views, though clear in the charging and investigation papers, was online poker. The money laundering claim doesn't require bit coin to be money. And if the entire scheme seems to be largely leverageable for laundering, and little other purpose it can be shut down for that reason. If the scheme is largely used to defraud regular unsuspecting public in can be shut down, not just for theft, but the scheme itself. Barry Madoff, Fulltilt, AB/UB are current examples. Bitcoin and crypto currency of sorts may very well find that same fate.

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