Bitcoin users in Florida may not be able to avoid regulation for much longer. Florida legislators are trying to pass a bill that will add “virtual currencies” to the list of monetary instruments under the state’s money-laundering statute. Law enforcement officials are praising the bill but bitcoin enthusiasts are not happy.
Bitcoin is a digital currency platform that allows parties to exchange money (bitcoin) without being linked to an identity. It is essentially unregulated and self-sustaining, as users are incentivized to keep the platform running smoothly. Many people are drawn to bitcoin for its ease of use and the anonymity in trading. A side effect of these conveniences is that bitcoin has the potential to be used for illicit activity. As Florida lawmakers have noticed, cyber criminals are concealing the profit of illegal activity using the digital currency.
The bill proposed by Florida state legislators, with assistance from Miami-Dade cyber-crimes prosecutors, will classify bitcoin as a “medium of exchange in electronic or digital format that is not a coin or currency of the United States or any other country.” Under current Florida law, bitcoin is not covered as a medium of exchange through which a money-laundering offense can be prosecuted. If the bill is passed, prosecutors will still need to prove intent as in any other money-laundering case. The law was proposed after a Florida judge dismissed a charge brought against website designer Michel Espinoza. Espinoza was accused of selling $1,500 worth of bitcoin knowing that the buyers intended to use the funds to purchase stolen credit-card information. Judge Teresa Mary Pooler, who made the ruling, said, “This court is unwilling to punish a man for selling his property to another when his actions fall under a statute that is so vaguely written that even legal professionals have difficulty finding a singular meaning.” The vagueness of current bitcoin and money-laundering legislation have forced Florida lawmakers to improve the law. Miami Rep. Jose Felix Diaz is sponsoring the bill which has passed in the Florida House of Representatives. Another version of the bill is awaiting approval in the Florida Senate.