FEDERAL JUDGE ACCEPTED BITCOIN AS A REAL CURRENCY.

FROM THE - JOURNALS of Monte Friesner – Criminal & Intelligence Analyst and Consulaire for WANTED SA ~ Contributed & Written by Kenneth Rijock

FEDERAL JUDGE HOLDS THAT BITCOIN IS MONEY AND BITCOIN INVESTMENT PROGRAMS ARE SECURITIES

The federal case involving a Ponzi scheme, which employed an investment in Bitcoins, that we recently covered here*, has resulted in some new law. In the pending case**, in the Eastern District of Texas, the court, speaking through District Judge Amos Mazzant, has held:

(1) That Bitcoin are money. "It is clear that Bitcoin can be used as money ... it can also be exchanged for conventional currency, such as the US Dollar, Euro, Yen, Yuan ... Bitcoin is an electronic form of currency unbacked by any real asset, and without specie, such as coin or precious metals."

(2) That investments in Bitcoin constitute securities, under the classic test laid out in SEC vs. Howey. They are (a) An investment of money, (b) in a common enterprise, (c) with the expectation that profit will be derived from the efforts of a third party. Memorandum Opinion regarding the Court's Subject Matter Jurisdiction.

The Ponzi schemer promised his clients a one per cent, per day, return on investment. All assets of Bitcoin Savings & Trust have been frozen by court order.

We have previously learned that Bitcoin dealers must register as MSBs, with both FinCEN, and state regulators. We now know that Bitcoin investments are securities, that it is the electronic, functional equivalent of money, and that it is, therefore, a form of currency, and thus able to be regulated.

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*SEC Issues Alert for Ponzi Schemes using Virtual Currency

** Case No.: 13-cv-00416-RC-ALM (ED TX).

Note to readers: there are other articles posted on Bitcoin; use the search box in the upper-left hand corner of the page to locate them.

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