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Federal Judge Rules Bitcoin is Money in Ponzi Scheme Case

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Bitcoin is Money SEC Ponzi Scheme Ruling

Bitcoin is Money, Say Federal Judge

A few weeks ago, we covered the story of Trendon T. Shavers, a Texas man charged by the SEC with running a Bitcoin ponzi scheme. Now labeled the “Bernie Madoff of Bitcoin,” Mr. Shavers founded and operated Bitcoin Savings and Trust (BTCST), and over 700,000 BTC through this investment vehicle, an amount equivalent to nearly $5 million USD at the time of raising, and roughly $70 million today.

One component of Shavers’ attempted defense was to call into question whether Bitcoin is truly a form of money and therefore can be regulated by the SEC. The federal judge ruled with no uncertainty that Bitcoin is money.

It is clear that Bitcoin can be used as money. It can be used to purchase goods or services, and as Shavers stated, used to pay for individual living expenses. The only limitation of Bitcoin is that it is limited to those places that accept it as currency. However, it can also be exchanged for conventional currencies, such as the U.S. dollar, Euro, Yen, and Yuan. Therefore, Bitcoin is a currency or form of money, and investors wishing to invest in BTCST provided an investment of money.

So much for that, Mr. Shavers.

Patrick Murck, general counsel for the Bitcoin Foundation, commented to Wired on the case. “This isn’t that shocking. If anyone wants to run a Ponzi scheme in Bitcoin, they can expect to get busted. If you run a Ponzi scheme anywhere, you’re gonna get busted — and you should. Bitcoin isn’t some sort of silver bullet that somehow ameliorates all the legal concern around your otherwise illegal activity.”

The full ruling by the court is embedded below.

 

CC image by Joe Gratz

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