The legal definition of bitcoin in the US still features a lot of blurred lines following a ruling in the ongoing JP Morgan case.
65-year-old Anthony Murgio tried to shake off two charges with a motion that claimed bitcoin could not be legally admissible as currency and as such, the money transfer business charges pinned to him by the prosecution had no solid grounds.
“Bitcoin is an Accepted Medium of Exchange” – Judge Alison Nathan
In a surprising twist, Judge Alison Nathan was quick to deny these claims from the defendant and proceeded to state that bitcoin, in its entirety, constitutes legal tender that can be accepted as payment for goods and can be bought from exchanged with a bank account.
Bitcoin can be use as a medium of exchange for services rendered or as a means of payment.
Murgio faces charges linking him to the fraudulent bitcoin exchange operation Coin.mx, which allegedly aided hackers responsible for hacking JP Morgan Chase.
The alleged owner of Coin.mx, an Israeli national by the name of Gery Shalon alongside his counterpart Ziv Orenstein, have both pleaded not guilty to charges.
No Middle Ground for Bitcoin Status
It is obvious that Murgio was seeking the same defense one Michell Espinoza had successfully tried in a Miami court.
In this case, Judge Teresa Mary Pooler dismissed the digital currency under the grounds that it did not constitute as tangible wealth and “could not be hidden under a mattress like gold bars and cash.”
According to reports, the judge went on to clarify that bitcoin was still very much in its nascent stages and that there was no way it could be held in the same accord as the dollar in respect to currency.
She pointed out that, at the time, there was no explicit consensus from any government entities that dictated bitcoin could be considered similar to the dollar as a form of currency.
A contrary opinion was issued further back when in 2013, a federal judge based in Texas ruled in favor of bitcoin being considered legal currency in a case that involved a Bitcoin-based hedge fund.
Although a lot of clarity is still required to consider the matter settled, the Financial Crimes Enforcement Network chipped contributed to the debate stating that Bitcoin-based business establishments count as Money Services Businesses under the law of the United States.
The IRS, however, explicitly stated their stand on the matter, saying that any form of cryptocurrency was held in the same regard as property and as such, was subject to capital gains tax.
Murgio was out of luck as Judge Nathan went ahead to dismiss the IRS’s stand in the matter saying that it was not relevant to the case.
She also pointed out that the IRS’s argument was only applicable to the federal tax laws of the United States.
Murgio was arrested in July 2015 together with other accomplices who had been linked to the hacking of JP Morgan Chase, ETrade, and News Corp.